Goldman Sachs analysts predict that if Kamala Harris secures the Democratic presidential nomination, her economic policies are unlikely to differ significantly from those of President Biden.
On Sunday, President Biden announced he would not pursue the Democratic nomination, following criticism of his debate performance against former President Donald Trump. Shortly after, he endorsed Vice President Harris, who expressed her intention to run and gained endorsements from notable figures including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro.
Goldman Sachs stated that they do not anticipate substantial changes in the Democrats’ fiscal and trade policy agenda should Harris become the nominee. Analysts, led by chief economist Jan Hatzius, noted that overall probability for a Democratic victory in the election would increase marginally, but still remain under 40%.
The firm previously outlined that the expiring provisions of the Tax Cut and Jobs Act at the end of 2025 would prompt a renewed focus on taxes next year, with key decisions pending on whether to extend aspects of the cuts or introduce new taxes.
Specific forecasts from Goldman Sachs regarding fiscal policy in a potential Biden administration include:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% and 37%.
– A suggested corporate tax rate of 28%, up from the current 21%, although analysts believe a more likely outcome would be a rate around 25%.
– An increase in the Social Security and Medicare tax rate to 5% on incomes above $400,000, up from the existing 3.8%.
In the event that Harris becomes the Democratic nominee, prediction markets indicate that the most likely candidates for the vice presidential slot include Pennsylvania Governor Josh Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, and Arizona Senator Mark Kelly.