Kamala Harris’ economic policies are expected to remain consistent if she secures the Democratic presidential nomination, according to analysts at Goldman Sachs.
President Biden announced on Sunday that he is withdrawing from the race for the Democratic nomination amidst increasing pressure for him to step aside following a less-than-stellar debate performance against Donald Trump. After his announcement, Biden endorsed Vice President Kamala Harris, who confirmed her intentions to continue her campaign. She has since garnered support from prominent figures including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy.
Goldman Sachs analysts, led by chief economist Jan Hatzius, indicated that there would be little change in the Democrats’ fiscal and trade policy agenda should Harris become the nominee. They noted that the likelihood of Democrats winning the presidency has increased slightly but remains under 40%.
The firm also highlighted that taxes are poised to be a significant focus in the upcoming year, particularly with the expiration of personal income tax provisions from the Tax Cuts and Jobs Act scheduled for the end of 2025. This situation will require the election winner to determine the future of these tax cuts and consider potential new taxes or reductions.
Goldman’s projections for fiscal policy under a potential Biden victory include a proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current 35%/37%. Additionally, they estimate Biden’s proposed corporate tax rate could rise to 28%, although they express skepticism about Congress agreeing to this figure, suggesting that a 25% rate may be more realistic. Meanwhile, Trump has promised to lower the corporate tax rate to 20%. Furthermore, Biden has proposed a 5% tax rate on Social Security and Medicare for incomes exceeding $400,000, raised from the existing 3.8%.
Should Harris become the nominee, speculation regarding her vice-presidential pick points to potential candidates such as Governors Shapiro of Pennsylvania, Roy Cooper from North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly.