Kamala Harris’ economic agenda is expected to remain largely consistent if she becomes the Democratic presidential nominee, according to insights from Goldman Sachs. President Biden announced his withdrawal from the race on Sunday amid increasing pressure for him to step down following a lackluster debate against former President Donald Trump. He subsequently endorsed Vice President Harris, who has expressed her intention to continue her candidacy and has garnered endorsements from prominent figures such as California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro.
Goldman’s analysts indicated that they do not foresee substantial changes to the Democratic Party’s fiscal and trade policies should Harris become the nominee. They noted that transitioning from Biden to Harris would marginally increase the Democrats’ chances of winning the White House, which currently stands at just under 40%.
The analysts highlighted that the focus on taxes will escalate next year with the scheduled expiration of the personal income tax provisions from the Tax Cut and Jobs Act at the close of 2025. This development will compel the incoming administration to determine the extent of any tax extensions or the introduction of new taxes.
Key fiscal policy forecasts from Goldman related to a Biden administration include:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35%/37%.
– An envisioned corporate tax rate of 28%, up from 21%, though Goldman expressed skepticism about Congress agreeing to this and suggested a more likely outcome could be a rate of 25%. In contrast, Trump intends to reduce the rate to 20%.
– A proposed increase in the Social Security and Medicare tax rate on incomes exceeding $400,000 to 5%, up from the current 3.8%.
If Harris secures the nomination, speculation regarding her vice presidential pick points to several governors, including Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Arizona Senator Mark Kelly.