Kamala Harris’ economic strategies are expected to remain largely unchanged if she secures the Democratic presidential nomination, according to analysts at Goldman Sachs.
Following President Biden’s announcement on Sunday to withdraw from the race amid growing pressure for him to step aside after a lackluster debate performance against former President Donald Trump, he endorsed Vice President Harris. She has expressed her intention to run and received endorsements from prominent 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, indicated that there would likely not be a significant shift in the Democratic Party’s fiscal and trade policies under Harris’s nomination. The odds of a Democratic win in the White House may increase minimally but are still just under 40%, according to the firm’s analysis.
The analysts noted the upcoming expiration of personal income tax provisions from the Tax Cuts and Jobs Act, set for the end of 2025, means tax policy will become a critical focus in the next election. The next president will influence decisions on the extension of tax cuts or the introduction of new taxes.
Key fiscal policy projections under a potential Biden administration include:
– A proposed tax rate of 39.6% on individuals earning $400,000 or more, increased from the current rates of 35%/37%.
– A proposed corporate tax rate of 28%, up from the present 21%, although Goldman expressed skepticism about Congress agreeing to this, suggesting a 25% rate might be more feasible.
– An increase in the Social Security and Medicare tax rate on incomes exceeding $400,000 from 3.8% to 5%.
In the event Harris becomes the nominee, speculation suggests that the vice presidential nomination could go to Pennsylvania Governor Shapiro, North Carolina’s Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly.