Goldman Sachs has indicated that Vice President Kamala Harris’ economic policies are unlikely to differ significantly from those of President Biden, should she become the Democratic presidential nominee. This came to light following Biden’s announcement on Sunday that he would not seek re-election, which followed mounting pressure for him to withdraw after a less-than-stellar debate against former President Donald Trump.
Immediately after his statement, Biden endorsed Harris, who confirmed her intent to run for the presidency. She has garnered support from notable figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite this leadership shift, Goldman analysts, led by chief economist Jan Hatzius, believe that there will not be a substantial change in the Democratic fiscal and trade policy agenda.
Goldman’s analysis showed that while the transition from Biden to Harris may slightly increase the chances of Democrats securing the White House—yet still keeping those odds below 40%—key fiscal decisions will remain ongoing. The firm noted that the expiration of tax provisions from the Tax Cuts and Jobs Act at the end of 2025 will loom large over future taxation discussions.
The firm outlined its projections for fiscal policy if Biden were to win, including:
– A proposed 39.6% tax rate 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 from 21% to 28%. However, Goldman expressed skepticism about Congress agreeing to this and mentioned that a more likely outcome could be a rate of 25%, while Trump has pledged to lower it to 20%.
– An increase in the Social Security and Medicare tax rate on incomes exceeding $400,000, suggested to rise from 3.8% to 5%.
In the event that Harris secures the nomination, leading prediction markets suggest that potential candidates for her vice presidential pick could include Governors Josh Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly of Arizona.