Kamala Harris’ economic policies are expected to remain largely consistent if she secures the Democratic presidential nomination, according to Goldman Sachs analysts. Following President Biden’s announcement that he would not seek re-election, amid increasing pressure after a subpar debate performance against Donald Trump, he expressed his support for Harris. The Vice President confirmed her candidacy shortly thereafter and received endorsements from prominent leaders like California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro.
Despite the leadership change, Goldman Sachs forecasts minimal deviation in fiscal and trade policies should Harris become the nominee. Analysts, led by chief economist Jan Hatzius, stated, “We would not expect the Democrats’ fiscal and trade policy agenda to shift meaningfully.” The financial institution believes that the likelihood of a Democratic victory under Harris has improved slightly, but still remains just below 40%.
As for fiscal policy, Goldman noted that the expiration of personal income tax provisions from the Tax Cuts and Jobs Act in 2025 could reshape the economic landscape, placing significant tax decisions in the hands of the next president. They estimated potential changes to tax rates, such as a proposed increase to a 39.6% tax rate for individuals earning over $400,000, and an increase in the corporate tax rate from 21% to possibly 28%, although a more realistic figure could be around 25%.
Looking ahead, if Harris takes on the presidential mantle, speculation about her vice presidential pick is already stirring, with names like Governors Shapiro and Roy Cooper, Kentucky’s Andy Beshear, and Arizona Senator Mark Kelly emerging as potential candidates.
This scenario presents a pivotal moment for the Democratic Party, particularly at a time when economic discussions will be crucial for voters. Harris’ ability to convey a clear economic vision could influence not only her candidacy but also shape the Democratic platform moving forward.
Overall, the transition from Biden to Harris could symbolize a fresh chapter for the Democratic Party, with the potential for new perspectives on long-standing economic challenges and opportunities for growth.