Kamala Harris’ economic strategies are unlikely to change significantly if she becomes the Democratic presidential nominee, according to Goldman Sachs.
On Sunday, President Biden announced he would not seek re-election, amid mounting pressure for him to step aside following a weak debate performance against Republican candidate and former President Donald Trump.
In his statement, Biden endorsed Vice President Kamala Harris, who expressed her intention to proceed with her candidacy and received endorsements from several notable figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, the expected policy shift remains minimal.
Goldman analysts, led by chief economist Jan Hatzius, noted that they do not anticipate a substantial change in the Democrats’ fiscal and trade policy agenda should Harris become the nominee. They indicated that the chances of Democrats winning the White House have increased slightly but still remain below 40%.
The firm had previously indicated that tax policies would become a primary focus in the upcoming year, with significant tax cuts from the Tax Cut and Jobs Act set to expire at the end of 2025. This means the new administration will be responsible for deciding the extent of any tax extensions or new tax implementations.
Goldman’s specific forecasts for fiscal policy under a potential Biden victory include:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% and 37%.
– A suggested corporate tax rate of 28%, up from 21%, though Goldman expresses skepticism about Congress agreeing to this figure, viewing a 25% rate as more realistic. In contrast, Donald Trump has pledged to lower the corporate rate to 20%.
– A proposed Social Security and Medicare tax rate of 5% on incomes over $400,000, which would be an increase from the current 3.8%.
If Harris secures the nomination, speculation indicates that likely candidates for the vice presidential slot could include Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly.