Kamala Harris’ economic proposals are not expected to undergo significant changes if she secures the Democratic presidential nomination, according to insights from Goldman Sachs.
President Biden announced on Sunday that he would withdraw from the Democratic nomination race as pressure increased for him to step aside following a lackluster debate performance against Republican candidate Donald Trump. Shortly after his announcement, Biden endorsed Vice President Harris, who expressed her intention to continue her campaign and garnered endorsements from several prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman analysts indicated that the transition from Biden to Harris will not lead to major policy adjustments.
Goldman’s chief economist Jan Hatzius noted in a recent report that they do not anticipate meaningful changes in the fiscal and trade policy agendas should Harris become the nominee. The analysts predict that the odds of the Democrats winning the White House would rise slightly but remain below 40%.
Previous analysis from Goldman suggested that tax policy would take center stage in the next year, particularly as the personal income tax cuts established by the Tax Cuts and Jobs Act are set to expire at the end of 2025. This will be a critical factor for the upcoming election winner, who will determine the future of these tax cuts and the potential introduction of new taxes.
Among their forecasts for fiscal policy under a Biden administration are the following figures:
– 39.6%: The proposed tax rate for individuals earning $400,000 or more, an increase from the current 35% or 37%.
– 28%: Biden’s proposed corporate tax rate, up from the current 21%, though Goldman remains doubtful that Congress would agree to this increase and suggests a more likely outcome of a 25% rate. In contrast, Trump has promised a reduction to 20%.
– 5%: The proposed increase in the Social Security and Medicare tax rate on incomes over $400,000, raised from the current 3.8%.
Should Harris be nominated, prediction markets indicate that potential candidates for the vice presidential slot may include Governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly of Arizona.