Kamala Harris’ economic proposals are expected to align closely with the current Democratic agenda if she secures the party’s presidential nomination, according to Goldman Sachs.
Following President Biden’s announcement that he will no longer pursue the Democratic nomination after a contentious debate with former President Donald Trump, he endorsed Vice President Kamala Harris. She has expressed her intention to move forward with her campaign, garnering support from prominent figures like California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, experts predict that this transition will not significantly alter Democratic policies.
Goldman analysts, led by chief economist Jan Hatzius, noted that they do not foresee a substantial shift in the Democrats’ fiscal and trade policy agenda, even with Harris at the forefront. After Biden’s endorsement, the likelihood of a Democratic victory in the upcoming election increased slightly but remains below 40%, as reported by Goldman.
The firm has highlighted that tax issues will take center stage in the near future, especially with the impending expiration of certain provisions from the Tax Cuts and Jobs Act in 2025. This situation will pose critical decisions for the next administration regarding the extension of tax cuts or the implementation of new taxes.
Goldman Sachs has provided several projections regarding fiscal policy under a potential Biden administration:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, up from the current rates of 35% and 37%.
– An increase in the corporate tax rate to 28%, up from the current 21%. The analysts expressed skepticism about Congress approving this rate, suggesting a more likely outcome of around 25%. In contrast, Donald Trump has pledged to reduce the rate to 20%.
– A proposed Social Security and Medicare tax rate of 5% on incomes exceeding $400,000, an increase from the existing rate of 3.8%.
Should Harris become the Democratic nominee, speculation indicates her potential running mates could include Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly.