Vice President Kamala Harris is poised to continue the economic policies of President Biden if she secures the Democratic presidential nomination, according to analysts at Goldman Sachs. Following Biden’s announcement that he would withdraw from the race, which came amid mounting pressure after a lackluster debate performance against former President Donald Trump, he endorsed Harris, who is eager to pursue her own candidacy. She has already garnered several significant endorsements, including those from California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro.
Despite the leadership change, Goldman Sachs anticipates minimal shifts in the Democratic Party’s fiscal and trade policy. Chief economist Jan Hatzius noted that, should Harris become the nominee, the fiscal agenda would not differ substantially from Biden’s.
Currently, Goldman Sachs estimates that the likelihood of the Democrats winning the presidency has increased slightly but remains under 40%. Analysts highlighted that tax policy will become a major focus in the upcoming election year as provisions from the Tax Cut and Jobs Act are set to expire at the end of 2025. The outcome of the election will significantly influence decisions regarding the extension of tax cuts and the potential introduction of new taxes.
Goldman’s projections for potential fiscal policy under a hypothetical Biden victory include a proposed tax rate of 39.6% for individuals earning over $400,000, a corporate tax rate increase to 28%, and a rise in Social Security and Medicare tax rates on high earners to 5%.
Should Harris secure the nomination, observers suggest strong contenders for the vice presidential slot could include Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly.