Kamala Harris’ economic proposals are expected to remain largely the same if she becomes the Democratic presidential nominee, according to analysts at Goldman Sachs.
Recent developments have seen President Biden announce his withdrawal from the race for the Democratic nomination amid growing pressure to step aside following a lackluster debate performance against Republican candidate Donald Trump. Shortly after his announcement, Biden endorsed Vice President Harris, who has expressed her commitment to pursuing her candidacy. She has garnered significant support from figures like California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite this shift, policy changes are not anticipated to be significant.
Goldman Sachs analysts, led by chief economist Jan Hatzius, stated that they do not expect a meaningful shift in the Democrats’ fiscal and trade policy agenda if Harris becomes the nominee. The analysis suggests that the chances of Democrats securing the White House have slightly increased but still remain just below 40%.
Looking ahead, Goldman previously noted that taxes are set to become a key fiscal focus next year, particularly as the personal income tax provisions of the Tax Cuts and Jobs Act will expire at the end of 2025. The next president will play a crucial role in determining whether to extend these cuts or implement new taxes.
Goldman’s forecast for fiscal policy includes potential changes in tax rates:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, up from the current rates of 35% and 37%.
– A suggested increase in the corporate tax rate to 28%, though Goldman expressed skepticism about Congress agreeing to this, viewing a 25% rate as more likely. In contrast, Donald Trump has promised to lower the rate to 20%.
– A proposed increase in the Social Security and Medicare tax rate on incomes above $400,000, raising it to 5% from the current 3.8%.
If Harris secures the nomination, speculation points to governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly as likely candidates for the vice presidential slot.