Kamala Harris’ economic strategies are likely to remain consistent if she becomes the Democratic presidential nominee, according to Goldman Sachs.
On Sunday, President Biden announced he would no longer pursue the Democratic nomination, following mounting pressure for him to withdraw after a lackluster debate performance against former President Donald Trump. Following his announcement, Biden endorsed Harris, who expressed her commitment to the campaign and secured endorsements from notable figures, including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro.
Goldman Sachs analysts, led by chief economist Jan Hatzius, stated that they do not anticipate a significant change in the Democrats’ fiscal and trade policies should Harris take the lead. They noted that Democrats’ chances of winning the presidency have improved slightly but remain under 40%.
With the expiration of certain personal income tax provisions from the Tax Cuts and Jobs Act approaching at the end of 2025, tax policy will be a key focus for the upcoming election. The outcome will determine potential extensions of tax cuts and any new tax implementations.
Goldman Sachs outlined specific forecasts regarding fiscal policies under a potential Biden victory:
– A proposed tax rate of 39.6% on individuals earning $400,000 or more, up from the current 35%/37%.
– A suggested corporate tax rate increase to 28%, which they consider optimistic, predicting a more likely rate of 25%. In contrast, Trump has pledged to lower the corporate tax rate to 20%.
– An increase in the Social Security and Medicare tax rate on incomes over $400,000 to 5%, up from the current 3.8%.
If Harris is nominated, predictions indicate that the top contenders for the vice presidential slot include governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Arizona Senator Mark Kelly.