Goldman Sachs indicates that if Kamala Harris secures the Democratic presidential nomination, her economic policies will largely remain in line with those of President Biden. This comes after President Biden announced he would not seek re-election amidst growing calls for him to step aside following a lackluster debate performance against Donald Trump.
Shortly after his announcement, Biden endorsed Harris, who confirmed her intention to run. She has since garnered support from notable figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts predict that a change in leadership will not significantly alter the policy landscape.
Goldman’s chief economist, Jan Hatzius, stated that they do not anticipate a meaningful shift in the Democrats’ fiscal and trade policy agenda if Harris becomes the nominee. The firm suggests that the odds of Democrats winning the presidency have marginally increased, approaching but not surpassing 40%.
Looking ahead, Goldman highlights that tax policy will be a central issue with the impending expiration of personal income tax provisions from the Tax Cut and Jobs Act by the end of 2025, which will impact future tax strategies for the next administration.
Some key fiscal policy forecasts from Goldman include a potential tax rate of 39.6% on individuals earning $400,000 or more, an increase from the current 35% to 37%; a proposed corporate tax rate of 28% by Biden, compared to the current 21%, though they are skeptical that Congress will approve it; and a proposed 5% tax increase on Social Security and Medicare for incomes exceeding $400,000, up from 3.8%.
If Harris is nominated, predictions suggest that the vice presidential spot could go to governors like Shapiro, Roy Cooper from North Carolina, Andy Beshear from Kentucky, or Arizona Senator Mark Kelly.