Kamala Harris’ economic strategies are expected to remain largely consistent even if she becomes the Democratic presidential nominee, according to Goldman Sachs.
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On Sunday, President Joe Biden announced that he would not seek the Democratic nomination, amid mounting pressures following a lackluster debate performance against former President Donald Trump. Shortly after, Biden endorsed Vice President Harris, who has expressed her intent to continue her campaign and has garnered high-profile endorsements from figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, the anticipated policy changes are expected to be minimal.
Goldman analysts, led by chief economist Jan Hatzius, stated in a note that they do not foresee a significant alteration in the Democrats’ fiscal and trade policy if Harris becomes the nominee. The analysts noted that this transition could slightly increase the Democrats’ chances of securing the White House, estimating those odds to be just under 40%.
The firm’s researchers had previously indicated that tax policy would be a primary focus in the coming year, particularly with personal income tax cuts from the Tax Cut and Jobs Act set to expire at the end of 2025. The outcome of the election will largely determine whether these cuts are extended or if new tax measures are implemented.
Goldman Sachs provided several key forecasts regarding fiscal policy in the event of a Biden victory:
– 39.6%: The tax rate under consideration for individuals earning $400,000 or more, potentially increasing from the current rate of 35%/37%.
– 28%: The proposed corporate tax rate by President Biden, an increase from the current 21%. Goldman believes a 25% rate is more likely to gain congressional approval, while presumptive Republican nominee Donald Trump has committed to reducing it to 20%.
– 5%: The proposed tax rate on Social Security and Medicare for incomes exceeding $400,000, up from the current 3.8%.
Should Harris secure the nomination, prediction markets suggest potential vice presidential candidates could include governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly from Arizona.