Goldman Sachs has indicated that Kamala Harris’ economic policies are unlikely to differ significantly if she becomes the Democratic presidential nominee. This analysis follows President Biden’s announcement that he will not seek re-election, amidst increasing pressure for him to step aside after a challenging debate against former President Donald Trump.
In the wake of Biden’s statement, he endorsed Vice President Harris, who has expressed her intention to pursue her candidacy and received strong endorsements from notable figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman analysts, led by chief economist Jan Hatzius, predict that the shift in leadership will not lead to a meaningful change in the Democratic Party’s fiscal and trade policies.
According to Goldman, the likelihood of the Democrats winning the White House has increased slightly, but remains below 40%. The firm’s prior assessments suggest that taxes will take center stage in fiscal discussions next year, particularly as provisions of the Tax Cuts and Jobs Act are set to expire by the end of 2025. The victory in the upcoming election will determine whether these tax cuts are extended or if new taxes are introduced.
Goldman Sachs has outlined key fiscal policy projections should Biden secure a victory:
– A potential increase in the tax rate on individuals earning over $400,000 to 39.6%, up from the current 35%/37%.
– A proposed rise in the corporate tax rate to 28%, up from 21%. However, Goldman remains doubtful that Congress will agree to this, predicting a more plausible rate of 25%.
– An increase in the Social Security and Medicare tax rate on incomes exceeding $400,000, proposed at 5%, up from 3.8%.
If Harris becomes the nominee, there are predictions that potential candidates for the vice presidential spot could include Governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly.