Goldman Sachs predicts that Kamala Harris’ economic plans will largely mirror those of President Biden, should she secure the Democratic presidential nomination. This comes after President Biden announced he would not seek re-election, following significant pressure to step back after a contentious debate against former President Donald Trump.
In his announcement, Biden endorsed Harris, who has signaled her intention to move forward with her campaign. She has already garnered support from prominent figures including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts from Goldman Sachs believe that the policy shifts will be minimal should Harris become the nominee.
Goldman analysts, led by chief economist Jan Hatzius, noted that they do not anticipate any major changes to the Democratic fiscal and trade policy agenda under Harris. The firm suggested that moving Harris into the nomination slot could marginally increase Democratic chances of winning the presidency, but the likelihood remains just below 40%.
Looking ahead, Goldman has indicated that tax policy will be a significant focus next year due to the impending expiration of certain income tax provisions from the Tax Cuts and Jobs Act at the end of 2025. The next president will play a crucial role in determining how these tax cuts are managed and whether new taxes or reductions will be introduced.
Goldman outlined several key fiscal policy forecasts if Biden were to win reelection:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% to 37%.
– An increase in the corporate tax rate to 28%, up from the current 21%, although Goldman expressed skepticism over Congress agreeing to this and suggested a more realistic outcome would be a rate of 25%.
– A proposed increase in the Social Security and Medicare tax rate on incomes above $400,000 from 3.8% to 5%.
If Harris is eventually nominated, analysts believe that potential candidates for the vice presidential position could include Governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly of Arizona.