Kamala Harris’ economic plans are unlikely to change significantly if she becomes the Democratic presidential nominee, according to Goldman Sachs.
President Biden announced he would not seek re-election due to increasing pressure following a shaky debate performance against Donald Trump. He quickly endorsed Vice President Harris, who has expressed her intention to run and has already gained support from prominent figures such as California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro.
Goldman analysts, led by chief economist Jan Hatzius, have indicated that the Democratic fiscal and trade policy agenda is expected to remain largely consistent if Harris is nominated. The likelihood of a Democratic victory in the upcoming presidential election appears to have only slightly increased, still hovering below 40%, according to Goldman’s assessment.
The firm previously projected that tax policy will become a central focus next year with the potential expiration of personal income tax provisions under the Tax Cut and Jobs Act at the end of 2025. The next administration will play a crucial role in determining the future of these tax cuts and any potential new taxes.
Goldman has provided specific forecasts regarding fiscal policy assuming a Biden victory:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current 35%/37%.
– A suggested corporate tax rate of 28%, up from the current 21%, although Goldman predicts a more feasible outcome would be around 25%.
– An increase in the Social Security and Medicare tax rate on incomes exceeding $400,000 from 3.8% to 5%.
Should Harris secure the nomination, speculation about potential vice presidential candidates includes Pennsylvania’s Governor Shapiro, North Carolina’s Roy Cooper, Kentucky’s Andy Beshear, and Arizona Senator Mark Kelly.