Goldman Sachs believes that Kamala Harris’ economic plans will closely mirror those of President Biden if she secures the Democratic presidential nomination.
Recently, President Biden announced that he would withdraw from the race for the Democratic nomination following increased pressure for him to step aside after a difficult debate against former President Donald Trump. In his statement, he endorsed Vice President Harris, who expressed her intent to continue her candidacy. She also gained endorsements from notable figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy.
Goldman Sachs analysts, led by chief economist Jan Hatzius, stated that they do not expect significant changes to the Democrats’ fiscal and trade policy agenda if Harris becomes the nominee. They assessed that the likelihood of the Democrats winning the White House has increased slightly but remains just under 40%.
The firm previously indicated that taxes will become a key focus in the upcoming year, with the expiration of personal income tax provisions from the Tax Cut and Jobs Act in 2025, which will allow the winner of the election to determine the future of these tax cuts.
Goldman Sachs provided some numerical forecasts for fiscal policy under a potential Biden victory:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current 35%/37%.
– A corporate tax rate proposed at 28%, up from the current 21%, although Goldman expressed doubt that Congress would agree and suggested a more likely outcome of a 25% rate. In contrast, Trump has pledged to lower the rate to 20%.
– A proposed increase in the Social Security and Medicare tax rate on incomes exceeding $400,000 from 3.8% to 5%.
Should Harris become the nominee, speculation exists surrounding potential vice presidential candidates, including Governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Senator Mark Kelly of Arizona.