Goldman Sachs suggests that if Vice President Kamala Harris becomes the Democratic presidential nominee, her economic plans are likely to remain largely unchanged from those of President Biden. This assessment follows Biden’s recent announcement that he will not seek re-election, which comes amid increasing pressure for him to step aside, particularly after a challenging debate against former President Donald Trump.
In his announcement, Biden endorsed Harris as his successor, and she has since expressed her intention to run, garnering notable endorsements from various governors, including Gavin Newsom of California, Josh Shapiro of Pennsylvania, and Phil Murphy of New Jersey. However, analysts at Goldman Sachs indicate that the transition from Biden to Harris would not significantly alter the Democratic party’s fiscal and trade policies.
Goldman noted that while the shift from Biden to Harris could marginally improve the Democrats’ chances of winning the presidency to just under 40%, the core economic policies are expected to remain stable. The firm highlighted that tax policy will be a critical issue in the upcoming election, especially with the impending expiration of tax provisions from the Tax Cut and Jobs Act in 2025, impacting decisions on potential tax cuts and new taxes.
The analysts provided specific fiscal policy projections under a potential Biden victory, including:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rate of 35%/37%.
– A potential corporate tax rate of 28%, although Goldman expressed doubts about Congress agreeing to this figure, predicting a more likely rate of 25%. In contrast, Trump has promised to lower the rate to 20%.
– An increase in the Social Security and Medicare tax rate on incomes above $400,000 to 5%, up from 3.8%.
If Harris is nominated, speculation about her choice for a running mate includes several governors such as Pennsylvania’s Shapiro, Roy Cooper from North Carolina, Andy Beshear of Kentucky, and Senator Mark Kelly from Arizona.