Vice President Kamala Harris’ economic policies are expected to remain largely consistent with those of President Biden if she becomes the Democratic presidential nominee, according to a recent report from Goldman Sachs.
Following President Biden’s announcement on Sunday that he would not seek reelection amid growing pressure and a challenging debate performance against former President Donald Trump, he endorsed Harris for the nomination. Harris confirmed her intention to run and received endorsements from notable figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts predict that this transition will not lead to significant changes in policy.
Goldman Sachs analysts, led by chief economist Jan Hatzius, noted in a statement that they do not anticipate a major shift in the Democrats’ fiscal and trade policy agenda should Harris be nominated. They indicated that the likelihood of a Democratic victory in the 2024 election would see a slight increase but would still be under 40%.
The firm previously mentioned that taxes would be a key focal point in the coming year, particularly with the impending expiration of certain provisions of the Tax Cuts and Jobs Act in 2025. The outcome of the election will determine how much of the tax cut is extended and whether new taxes will be implemented.
Goldman Sachs provided specific forecasts for fiscal policy under a potential Biden administration, including:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% or 37%.
– A proposed corporate tax rate of 28%, up from the current 21%. Analysts are skeptical about Congress agreeing to this proposal and suggest a more likely outcome would be a rate around 25%, while Trump has promised a reduction to 20%.
– A proposed increase in the Social Security and Medicare tax rate to 5% for incomes over $400,000, raised from the current 3.8%.
If Harris becomes the nominee, speculation suggests that potential candidates for the vice presidential slot include Governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Senator Mark Kelly from Arizona.