Kamala Harris’ economic policies are expected to remain consistent if she secures the Democratic presidential nomination, according to analysts from Goldman Sachs.
President Biden announced on Sunday that he is withdrawing from the race for the Democratic nomination amid mounting pressure following a difficult debate against former President Donald Trump. Shortly thereafter, Biden endorsed Vice President Harris, who expressed her intention to continue her campaign and received endorsements from notable figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, this transition is not anticipated to lead to significant changes in policy.
Goldman Sachs analysts, led by chief economist Jan Hatzius, indicated that the Democrats’ fiscal and trade policy agendas are unlikely to change significantly if Harris is nominated. They noted that the likelihood of Democrats winning the White House has increased slightly but remains just under 40%.
The analysts highlighted that taxes are likely to become a central focus next year, with the expiration of personal income tax provisions from the Tax Cuts and Jobs Act set for the end of 2025. The outcome of the election will determine whether these cuts will be extended and if new taxes or reductions will be introduced.
Goldman’s projections for fiscal policy under a Biden administration include a proposed tax rate of 39.6% for individuals earning over $400,000, an increase from the current 35%-37%. Additionally, they project a corporate tax rate of 28%, though they express skepticism about Congress’s willingness to agree, suggesting a more realistic outcome would be a 25% rate. In terms of Social Security and Medicare, Biden has proposed a tax rate of 5% on incomes above $400,000, up from 3.8%.
Should Harris become the nominee, speculation surrounds potential vice presidential candidates, with Pennsylvania Governor Josh Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, and Arizona Senator Mark Kelly being considered top choices.