Kamala Harris’ economic strategies are expected to remain largely consistent if she emerges as the Democratic presidential nominee, according to analysts at Goldman Sachs.
In a significant development, McDonald’s is now facing its first lawsuit linked to the E. coli outbreak associated with its Quarter Pounder.
In political news, President Biden announced on Sunday that he will withdraw from the race for the Democratic nomination, following increasing demands for him to step aside after a less-than-stellar debate against former President Donald Trump, the Republican candidate.
Shortly after his announcement, Biden endorsed Vice President Kamala Harris, who expressed her intention to continue her campaign. She has garnered multiple endorsements from prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts believe that this change at the top will not significantly alter the party’s fiscal policies.
Goldman Sachs noted in a report that they do not anticipate a substantial shift in the Democrats’ fiscal and trade policy agenda should Harris become the nominee, as indicated by chief economist Jan Hatzius.
The possibility of Harris replacing Biden has slightly improved the Democrats’ chances of winning the presidency, with Goldman estimating the probability to be just under 40%.
Goldman analysts emphasized that tax policy will be a crucial issue in the upcoming year, particularly with the impending expiration of personal income tax cuts under the Tax Cut and Jobs Act at the end of 2025. The outcome of the election will determine whether these cuts are extended and if new taxes or reductions are introduced.
Among the forecasts for fiscal policy in the event of a Biden victory are the following:
– 39.6%: Proposed tax rate for individuals earning $400,000 or more, an increase from the current 35%/37%.
– 28%: Biden’s suggested corporate tax rate, an increase from the current 21%. Goldman expressed skepticism that Congress would agree to this and noted that a 25% rate is more likely. In contrast, Trump has promised to reduce the corporate tax rate to 20%.
– 5%: Proposed increase in Social Security and Medicare tax rate on incomes exceeding $400,000, up from the current 3.8%.
If Harris secures the nomination, prediction markets suggest that the favorites for the vice presidential nomination could include Governors Shapiro, Roy Cooper from North Carolina, Andy Beshear from Kentucky, or Senator Mark Kelly from Arizona.