In a recent analysis, Goldman Sachs indicated that Vice President Kamala Harris’ economic policies would not differ significantly from President Biden’s if she were to become the Democratic presidential nominee.
After facing increasing pressure to step down following a challenging debate performance against former President Donald Trump, President Biden announced on Sunday that he is withdrawing from the race for the Democratic nomination. He subsequently endorsed Harris, who expressed her commitment to continue her candidacy. She has garnered support from several prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, the anticipated policy changes are expected to be minimal.
Goldman Sachs analysts, led by chief economist Jan Hatzius, noted that they do not anticipate any meaningful shift in the Democrats’ fiscal and trade policy agenda if Harris becomes the nominee. The firm’s research suggested that the chances of Democrats winning the presidency have increased slightly but remain just below 40%.
Looking ahead, Goldman previously mentioned that taxes will take center stage in fiscal discussions next year as key provisions of the Tax Cuts and Jobs Act are set to expire at the end of 2025. The outcome of the upcoming election will play a crucial role in determining the future of these tax cuts and any potential new tax initiatives.
Goldman’s forecast for fiscal policy remains focused on several key percentages: a proposed tax rate of 39.6% for individuals earning $400,000 or more (up from the current rates of 35% and 37%), a suggested corporate tax rate of 28% (increased from 21%, though analysts express doubt that Congress would agree, proposing 25% as more realistic), and a new Social Security and Medicare tax rate of 5% on incomes exceeding $400,000 (up from 3.8%).
Should Harris secure the presidential nomination, speculation suggests that her vice presidential pick might include candidates such as Governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly of Arizona.