Goldman Sachs anticipates that Vice President Kamala Harris’ economic policies, if she becomes the Democratic presidential nominee, will largely mirror those of President Joe Biden. This projection comes in the wake of Biden’s announcement that he would withdraw from the race, following criticism regarding his performance in a recent debate with Republican Donald Trump.
After Biden’s statement, he endorsed Harris for the nomination, and she swiftly confirmed her candidacy, gaining support from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite the leadership change, analysts at Goldman Sachs do not foresee significant changes in the Democratic Party’s fiscal and trade policy agenda.
Goldman noted that while the chance of the Democrats retaining the White House has improved slightly, it remains just under 40%. The firm had previously indicated that tax policy will be a key issue in the upcoming election, especially as current provisions from the Tax Cut and Jobs Act are set to expire at the end of 2025.
Specific forecasts include a proposed tax rate of 39.6% for those earning $400,000 or more, an increase in the corporate tax rate to 28% from the current 21%, and a raised Social Security and Medicare tax rate on high earners.
If Harris is nominated, speculation is mounting regarding potential vice presidential candidates, with names such as Governors Shapiro and Roy Cooper, Kentucky’s Andy Beshear, and Arizona Senator Mark Kelly being considered for the position.