Kamala Harris’ economic plans are expected to remain largely unchanged if she becomes the Democratic presidential nominee, according to analysts at Goldman Sachs.
On Sunday, President Biden announced that he would not seek the Democratic nomination, following intensifying calls for him to step aside after a lackluster debate performance against former President Donald Trump. Biden subsequently endorsed Vice President Harris, who expressed her intention to continue her candidacy and received significant endorsements from prominent figures including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, experts at Goldman Sachs anticipate that there will not be major shifts in policy as a result of this change.
Goldman Sachs noted that they do not expect the Democrats’ fiscal and trade policy agenda to significantly change if Harris becomes the nominee. They estimated that the odds of the Democrats winning the White House increased slightly but still remain below 40%.
The firm indicated that the focus on taxes will intensify in the coming year, especially as provisions of the Tax Cut and Jobs Act are set to expire at the end of 2025. This situation means that the next president will have to decide on the fate of these tax cuts and whether to introduce new taxes or alterations.
Goldman Sachs provided several forecasts regarding fiscal policy under a hypothetical Biden administration, 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%.
– A proposed rise in the corporate tax rate to 28%, up from 21%, with Goldman expressing skepticism that Congress would approve such an increase, suggesting a more realistic outcome would be a rate of 25%. In contrast, Trump has promised to reduce the corporate tax rate to 20%.
– A proposed increase in the Social Security and Medicare tax rate to 5% for incomes over $400,000, raised from the current 3.8%.
If Harris were to become the nominee, prediction markets indicate that potential candidates for the vice presidential slot include Governors Shapiro (Pennsylvania), Roy Cooper (North Carolina), Andy Beshear (Kentucky), or Senator Mark Kelly (Arizona).