Goldman Sachs anticipates that if Kamala Harris becomes the Democratic presidential nominee, her economic policies will closely mirror those of President Biden. This prediction came after President Biden withdrew from the race, endorsing Harris, who has received support from notable figures like California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro.
Goldman analysts believe that the overall fiscal and trade agendas for Democrats are unlikely to undergo significant changes under Harris. They forecast only a slight increase in the likelihood of a Democratic victory in the upcoming election, estimating it at just under 40%. One major point of focus for the upcoming fiscal discussions will be the potential expiration of personal income tax provisions under the Tax Cuts and Jobs Act by 2025, which will be shaped by the next administration.
Goldman outlined key aspects of Biden’s proposed fiscal policies, including a suggested increase of the tax rate on high earners (those making over $400,000) from 35% to 39.6% and a proposed hike in the corporate tax rate from 21% to 28%. They express skepticism regarding Congress’s agreement on the higher rates, suggesting that a 25% corporate tax rate may be more feasible. The report also mentions a proposed increase in the Social Security and Medicare tax rate for high incomes.
In terms of the vice presidential selection, prediction markets hint at several viable candidates, including Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, and Arizona Senator Mark Kelly.
This analysis serves as a reminder that as candidates emerge and shift, continuity in policy can offer stability during an election, allowing voters to assess their choices based on closely aligned platforms. Many will be watching how these developments unfold in the coming months, hopeful for a clear vision that transcends political divides.