Goldman Sachs suggests that Kamala Harris’ economic policies are unlikely to drastically change if she becomes the Democratic presidential nominee.
Following President Biden’s decision to withdraw from the race amid increasing pressure after a weak debate performance against Donald Trump, he endorsed Vice President Harris, who has expressed her intention to continue her campaign. She has already received notable support from figures like California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy.
Goldman Sachs analysts, led by chief economist Jan Hatzius, stated that they do not foresee significant shifts in the Democrats’ fiscal and trade policy agenda under Harris. Their report indicated that while the odds of a Democratic victory in the upcoming election have modestly increased, they still estimate them to be just under 40%.
The firm previously noted that taxes will be a major focus in the next fiscal year, particularly as the personal income tax provisions of the Tax Cut and Jobs Act are set to expire at the end of 2025. The outcome of the election will play a crucial role in determining the extension of these cuts and the potential introduction of new taxes.
Goldman’s forecasts for fiscal policy in the event of a Biden victory include a potential tax rate of 39.6% on individuals earning $400,000 or more, an increase in corporate tax rates from 21% to 28%, and a rise in the Social Security and Medicare tax on high earners from 3.8% to 5%.
If Harris secures the nomination, speculation about her choice for vice president includes governors such as Shapiro, North Carolina’s Roy Cooper, Kentucky’s Andy Beshear, and Arizona Senator Mark Kelly.