Vice President Kamala Harris is likely to maintain similar economic policies if she becomes the Democratic presidential nominee, according to Goldman Sachs.
Following President Biden’s announcement on Sunday that he will not seek re-election, which was influenced by criticism of his recent debate performance against Donald Trump, he endorsed Harris, who confirmed her intention to run. She has since gained support from several prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite the leadership change, Goldman Sachs analysts indicated that there would not be significant adjustments to the Democrats’ fiscal and trade policy agenda.
Goldman’s analysis suggested modest improvements in the odds of Democratic success in the upcoming election, now estimated at just under 40%. They also highlighted that fiscal discussions in the coming year will likely focus on taxes, especially with several personal income tax provisions from the Tax Cuts and Jobs Act set to expire at the end of 2025. Thus, the next administration will face decisions on tax extensions and potential increases.
The firm provided several predictions regarding fiscal policies under a potential Biden victory:
– A proposed tax rate of 39.6% on those earning $400,000 or more, an increase from the current rates of 35% or 37%.
– A proposed corporate tax rate increase to 28%, up from the current 21%, although they believe that a more feasible outcome would be around 25%.
– An increase in the Social Security and Medicare tax rate on incomes above $400,000, proposed to rise from 3.8% to 5%.
If Harris secures the nomination, speculation around her choice for vice president includes names such as Governor Shapiro of Pennsylvania, North Carolina’s Roy Cooper, Kentucky’s Andy Beshear, and Arizona Senator Mark Kelly.