Goldman Sachs has stated that if Vice President Kamala Harris becomes the Democratic presidential nominee, her economic plans will largely align with those of President Biden. This analysis comes in the wake of President Biden’s announcement that he will not seek re-election, following criticism of his debate performance against former President Donald Trump.
After Biden’s declaration, he quickly endorsed Harris, who indicated her intention to continue her candidacy. She has since garnered support from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts at Goldman Sachs maintain that there will be minimal changes to policy under a Harris nomination.
According to Goldman, the Democratic Party’s fiscal and trade policies are unlikely to experience significant changes with Harris at the helm. They noted that the probability of a Democratic victory in the upcoming presidential election has slightly increased, yet remains below 40%.
The firm previously highlighted that taxes will be a key focus in 2024, particularly with the impending expiration of personal income tax provisions from the Tax Cuts and Jobs Act at the end of 2025. The outcome of the election will be crucial in determining whether these cuts are extended or new taxes are introduced.
Goldman Sachs offered specific predictions regarding tax policies under a potential Biden victory. They estimate that Democrats may consider a tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% and 37%. They project Biden’s proposed corporate tax rate would rise to 28%, up from 21%, but expressed skepticism that Congress would approve this, with a 25% rate appearing more feasible. Additionally, they mentioned a proposed increase in the Social Security and Medicare tax rate on high earners to 5%, up from 3.8%.
If Harris secures the nomination, speculation about her potential running mate points to figures like Governors Shapiro, Roy Cooper (North Carolina), Andy Beshear (Kentucky), or Senator Mark Kelly (Arizona).