Kamala Harris’ economic strategies are not expected to change significantly if she secures the Democratic presidential nomination, according to analysts at Goldman Sachs.
In a statement released on Sunday, President Biden announced that he would not pursue the Democratic nomination amid growing pressure for him to step aside following a challenging debate performance against Republican candidate Donald Trump. Shortly after, Biden endorsed Vice President Harris, who expressed her intention to run and garnered endorsements from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs indicated that there would not be a substantial shift in policy.
Analysts, led by chief economist Jan Hatzius, noted that they do not expect a significant change in the Democrats’ fiscal and trade policy agenda if Harris becomes the nominee. They assessed that the chances of the Democrats winning the presidency increased slightly but remain below 40%.
Goldman Sachs previously highlighted that tax policy will be a primary fiscal focus in the upcoming year, particularly as personal income tax measures from the Tax Cut and Jobs Act are set to expire at the end of 2025. The outcome of the election will determine the future of these tax cuts and the potential introduction of new taxes.
The firm provided several fiscal policy forecasts, including a proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% and 37%. Additionally, Biden’s suggested corporate tax rate of 28% would rise from 21%, though Goldman expressed doubt that Congress would agree, predicting a more likely outcome of around 25%. Furthermore, Biden proposes a 5% tax on Social Security and Medicare for incomes exceeding $400,000, compared to the current 3.8%.
If Harris proceeds as the nominee, speculation on possible vice presidential candidates includes governors Shapiro, Roy Cooper from North Carolina, Andy Beshear from Kentucky, and Senator Mark Kelly from Arizona.