Kamala Harris’ economic proposals are expected to align closely with those of President Biden if she secures the Democratic presidential nomination, according to analysts at Goldman Sachs.
Following President Biden’s decision to withdraw from the race amidst mounting pressure after a lackluster debate performance against former President Donald Trump, he endorsed Vice President Kamala Harris. She has publicly expressed her intention to continue her candidacy and has gained endorsements from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, experts predict that there will not be significant changes in policy direction.
Goldman Sachs analysts, led by Chief Economist Jan Hatzius, noted that if Harris becomes the nominee, the Democratic fiscal and trade policy agenda is unlikely to see major shifts. The firm indicated that the chances of Democrats winning the presidency have increased slightly, now estimated at just below 40%.
The focus on taxation will become more prominent next year with the impending expiration of the personal income tax changes from the Tax Cuts and Jobs Act at the end of 2025. The next administration will have to decide on the extension of these tax cuts and the introduction of new taxes.
Goldman’s projections for fiscal policy under a potential Biden victory include a proposed tax rate of 39.6% on individuals earning $400,000 or more, an increase from the current rates of 35% and 37%. They also anticipate a higher corporate tax rate of 28%, up from 21%, although they express skepticism about Congress agreeing to this, predicting a more likely outcome of 25%. Additionally, there is a proposed increase in the tax rate for Social Security and Medicare on incomes above $400,000 to 5% from the current 3.8%.
Should Harris become the nominee, speculation suggests that notable figures such as Governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly could be in the running for the vice presidential nomination.