Analysts at Goldman Sachs have suggested that Kamala Harris’ economic agenda would likely remain largely consistent with the current administration’s plans if she secures the Democratic presidential nomination. This assessment comes on the heels of President Biden’s announcement that he would withdraw from the race, following mounting pressure related to his recent debate performance against Donald Trump.
Biden, shortly after making his announcement, publicly endorsed Harris, who has expressed her commitment to running. Her candidacy has garnered significant endorsements from prominent figures, including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro. However, Goldman Sachs indicates that this shift in leadership may not lead to major changes in fiscal and trade policies.
In their analysis, Goldman Sachs predicted that the Democrats’ fiscal policy agenda would remain stable, estimating only a slight increase in the odds of winning the presidency under Harris’ nomination—reaching just below 40%. Analysts previously highlighted that taxes would eventually become a primary focus due to the impending expiration of the personal tax provisions enacted by the Tax Cuts and Jobs Act by the end of 2025, which will obligate the winning candidate to determine tax extensions and potential new tax policies.
Some specific fiscal policy forecasts include a proposed tax rate of 39.6% for individuals earning over $400,000, up from the current rates of 35% and 37%. The proposed corporate tax rate under Biden’s administration is aimed to rise to 28%, although Goldman analysts doubt that Congress will agree to this increase, suggesting a more feasible rate of 25%. Additionally, a higher Social Security and Medicare tax rate of 5% on incomes exceeding $400,000 (an increase from 3.8%) has been proposed.
If Harris does secure the nomination, speculation has arisen regarding potential vice presidential candidates, with notable mentions including Governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly from Arizona.
In summary, Kamala Harris’ presumed candidacy signals continuity in economic policy. With prominent endorsements backing her, the Democratic Party remains poised for the upcoming election cycle, navigating a landscape that will likely see continued discussions on fiscal responsibility and tax reform. This stability might provide voters with a sense of familiarity, balancing change with a commitment to existing policy frameworks.