Goldman Sachs has expressed that if Vice President Kamala Harris were to become the Democratic presidential nominee, her economic policies would likely mirror those of President Biden. This insight follows President Biden’s recent announcement that he will not seek re-election, acknowledging intense pressure after a challenging debate performance against former President Donald Trump.
Biden promptly endorsed Harris, who has embraced her candidacy with the backing of numerous influential figures, including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro. Despite the leadership change, Goldman analysts, led by chief economist Jan Hatzius, predict minimal shifts in the Democrats’ fiscal and trade agenda.
The firm estimates a slightly increased likelihood—though still under 40%—for Democratic success at the polls under a Harris candidacy. With the Tax Cut and Jobs Act personal income tax provisions set to expire at the end of 2025, tax policy will be a critical focus in the upcoming election. According to Goldman’s forecasts, Democrats are contemplating a tax increase for individuals earning over $400,000, potentially raising their rates from a current maximum of 37% to 39.6%. They also project an increase in the corporate tax rate from 21% to 28%, despite skepticism about that level being approved by Congress.
Additionally, Democrats are looking at a possible rise in the Social Security and Medicare tax rate for high-income earners, which could go up to 5%.
In the event of a Harris nomination, there is speculation about potential vice presidential candidates, with governors like Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Arizona Senator Mark Kelly being considered.
This political shift carries the potential for the Democratic Party to continue its fiscal trajectory while fostering new leadership. As the election approaches, it emphasizes the importance of addressing economic inequalities and shaping progressive tax policies, which could resonate with a significant voter base seeking change.
Overall, while change may be subtle at the policy level, the transition to Harris’ candidacy offers a moment for renewal within the Democratic strategy that could captivate the electorate’s attention positively.