Goldman Sachs suggests that if Kamala Harris becomes the Democratic presidential nominee, her economic policies will not significantly differ from those of President Biden. This comes after Biden announced his withdrawal from the race amid increasing pressure following a challenging debate against Republican candidate Donald Trump.
Following his announcement, Biden endorsed Vice President Harris, who expressed her intent to continue her campaign and received support from several prominent figures including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro. Despite these changes, Goldman Sachs analysts, led by chief economist Jan Hatzius, predict minimal shifts in the Democratic fiscal and trade policy agenda under Harris.
Goldman noted that the Democrats’ chances of winning the presidency have increased slightly but still remain under 40%. Analysts pointed out that the focus on taxes will intensify next year as the personal income tax provisions from the Tax Cuts and Jobs Act are set to expire at the end of 2025, emphasizing that the incoming president will have significant influence over potential tax extensions or new cuts.
Goldman Sachs outlined potential tax rates under Biden’s leadership: a proposed 39.6% tax rate for individuals earning $400,000 or more, an increase in the corporate tax rate to 28% from the current 21%, and a higher Social Security and Medicare tax rate of 5% for incomes above $400,000.
If Harris secures the nomination, speculation indicates that potential running mates could include Governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly of Arizona.