Vice President Kamala Harris’ economic agenda is expected to remain largely similar if she becomes the Democratic presidential nominee, according to analysts at Goldman Sachs.
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President Joe Biden announced on Sunday that he would withdraw from the race for the Democratic nomination amid increasing calls for him to step aside following a lackluster debate performance against former President Donald Trump. Following his announcement, Biden endorsed Harris, who expressed her intention to continue her candidacy. She received endorsements from notable figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs believes that this transition will not result in significant changes to policy.
Goldman Sachs analysts, led by chief economist Jan Hatzius, stated in a note that they do not anticipate a meaningful shift in the Democratic Party’s fiscal and trade policy agenda if Harris is nominated. The chance of Democrats winning the presidency has increased slightly, but remains just under 40%, according to the firm.
Previously, Goldman Sachs indicated that taxes would become a central focus in the coming year, particularly with the expiration of the personal income tax provisions from the Tax Cuts and Jobs Act at the end of 2025. This means the eventual election winner will determine the future of these tax cuts and any potential new taxes.
Goldman Sachs also provided specific forecasts for fiscal policy under a potential Biden victory:
– 39.6%: The proposed tax rate on individuals earning $400,000 or more, an increase from the current rates of 35% or 37%.
– 28%: Biden’s suggested corporate tax rate, up from the current 21%. Goldman believes a 25% rate is more likely to gain congressional approval, while Trump has pledged to reduce the rate to 20%.
– 5%: The proposed tax rate for Social Security and Medicare on incomes exceeding $400,000, an increase from the current 3.8%.
Should Harris secure the nomination, prediction markets are favoring several potential candidates for the vice presidential slot, including Governors Shapiro (Pennsylvania) and Roy Cooper (North Carolina), Governor Andy Beshear (Kentucky), and Senator Mark Kelly (Arizona).