Goldman Sachs suggests that Vice President Kamala Harris’ economic plans, should she become the Democratic presidential nominee, will not vary significantly from those of President Biden. This comes after Biden announced he would withdraw from the race, spurred by pressure following a lackluster debate performance against Donald Trump.
In his announcement, Biden endorsed Harris, who confirmed her intention to run. She has since collected several high-profile endorsements from governors including Gavin Newsom of California, Josh Shapiro of Pennsylvania, and Phil Murphy of New Jersey. Despite this transition, expected policy changes are minimal.
Goldman analysts, led by chief economist Jan Hatzius, noted that they do not anticipate a significant shift in the Democrats’ fiscal and trade policies if Harris becomes the nominee. The investment firm indicated that the likelihood of Democrats winning the White House increased slightly, though it remains under 40%.
Looking ahead, Goldman previously indicated that tax policy will be a primary focus next year, particularly with the impending expiration of tax cuts from the Tax Cuts and Jobs Act at the end of 2025. This suggests the next president will have to decide on extending these cuts and potential new taxes.
Particulars of their fiscal policy forecasts include:
– A proposed 39.6% tax rate for individuals earning $400,000 or more, an increase from the current 35%/37%.
– A potential rise in the corporate tax rate to 28%, up from 21%, though Goldman expressed skepticism about Congressional approval, suggesting 25% might be more feasible. In contrast, Trump has promised to reduce this rate to 20%.
– A proposed increase in the Social Security and Medicare tax rate on incomes over $400,000 from 3.8% to 5%.
If Harris secures the nomination, speculation suggests strong candidates for the vice presidential slot may include governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly.