Kamala Harris’ economic plans are expected to remain largely unchanged if she secures the Democratic presidential nomination, according to analysts at Goldman Sachs.
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President Biden announced on Sunday his decision to withdraw from the Democratic nomination process amid mounting pressure following a lackluster debate performance against Republican candidate and former President Donald Trump. Shortly after his announcement, Biden publicly endorsed Vice President Kamala Harris, who expressed her intention to continue her campaign and has received several high-profile endorsements, including from California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy.
However, Goldman Sachs analysts do not anticipate significant shifts in the Democrats’ fiscal and trade policies under Harris’s potential leadership. They noted that the likelihood of a Democratic victory in the upcoming presidential election slightly increased but remains just below 40%.
Goldman researchers also highlighted that taxes would be a primary focus in the coming year, particularly as the provisions from the Tax Cut and Jobs Act expire at the end of 2025. The outcome of the election will be crucial in determining whether these tax cuts will be extended or if new tax policies will be introduced.
Some of Goldman’s predictions regarding fiscal policy under a Biden win include:
– 39.6%: The potential tax rate Democrats are considering for individuals earning $400,000 or more, increased from the current rates of 35% and 37%.
– 28%: The proposed corporate tax rate under Biden, which is up from the current 21%. Goldman expressed skepticism that Congress would approve this, suggesting a more likely rate of 25%. In contrast, Donald Trump has pledged to reduce this rate to 20%.
– 5%: The suggested increase in the Social Security and Medicare tax rate for incomes exceeding $400,000, up from the current 3.8%.
If Harris becomes the nominee, prediction markets believe that the vice presidential position may likely go to governors such as Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly from Arizona.