Goldman Sachs suggests that Kamala Harris’ economic policies are unlikely to differ significantly from President Biden’s if she becomes the Democratic presidential nominee.
On Sunday, Biden announced he would not seek reelection amidst mounting pressure following an unimpressive debate against former President Donald Trump. Shortly after, he endorsed Vice President Harris, who has expressed her intention to continue her candidacy. She has garnered support from notable figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy.
Goldman analysts, led by chief economist Jan Hatzius, noted that they do not anticipate major changes in the Democrats’ fiscal and trade policies with Harris as the nominee. They indicated that the chances of Democrats securing the presidency have slightly increased but remain just below 40%.
The investment firm previously stated that taxes will emerge as a crucial issue next year due to the impending expiration of personal income tax provisions from the Tax Cut and Jobs Act, which will end in 2025. The outcome of the election will determine whether these tax cuts are extended or if new taxes or cuts are introduced.
Goldman’s forecasts for fiscal policy in the event of a Biden victory include a proposed tax rate of 39.6% on individuals earning $400,000 or more, an increase from the current rates of 35% and 37%. They also predict a proposed corporate tax rate of 28%, up from 21%, though they express skepticism about Congress agreeing to this and suggest a more feasible rate of 25%. Additionally, Biden’s plan includes increasing the Social Security and Medicare tax rate on incomes above $400,000 from 3.8% to 5%.
Should Harris secure the nomination, speculation indicates that potential candidates for the vice presidential slot may include Governor Shapiro of Pennsylvania, Governor Roy Cooper of North Carolina, Governor Andy Beshear of Kentucky, or Senator Mark Kelly of Arizona.