Kamala Harris’ economic policies are unlikely to differ significantly if she becomes the Democratic presidential nominee, according to analysts at Goldman Sachs.
Following President Biden’s announcement that he will not seek reelection, amid increasing pressure after a challenging debate with former President Donald Trump, he endorsed Vice President Harris. She expressed her intention to continue her campaign and received support from notable figures including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts suggest that this transition will not greatly alter Party policies.
Goldman Sachs analysts, led by chief economist Jan Hatzius, noted that they do not expect any significant changes in the Democrats’ fiscal and trade policy agenda if Harris becomes the nominee. Although the chance of the Democrats retaining the White House increased slightly with Harris’s candidacy to just below 40%, the firm’s insights point to taxation becoming a primary issue next year, especially with key provisions of the Tax Cut and Jobs Act set to expire at the end of 2025. The upcoming election will determine decisions regarding the continuation of these tax cuts.
Goldman Sachs highlighted specific forecasts for fiscal policy if Biden were to win, suggesting the following potential tax changes:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% and 37%.
– A suggested corporate tax rate of 28%, up from the current 21%. Analysts remain doubtful that Congress will agree to this, predicting that a more feasible rate might be around 25%. In contrast, Trump aims to lower it to 20%.
– An increase in the Social Security and Medicare tax rate on incomes over $400,000, proposed to be 5%, up from 3.8%.
Should Harris secure the nomination, prediction markets indicate that potential candidates for the vice presidential slot could include Governor Shapiro, North Carolina’s Roy Cooper, Kentucky’s Andy Beshear, or Senator Mark Kelly of Arizona.