Vice President Kamala Harris is expected to maintain a similar economic strategy if she emerges as the Democratic presidential nominee, according to analysts at Goldman Sachs.
President Joe Biden announced on Sunday that he would not seek re-election, following mounting pressure after a difficult debate against former President Donald Trump. In his statement, Biden endorsed Harris, who confirmed her candidacy and garnered notable endorsements from figures like California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts predict that a transition from Biden to Harris would not dramatically alter the Democratic Party’s policy agenda.
Goldman analysts, led by chief economist Jan Hatzius, suggested that there would likely be no significant change in fiscal and trade policies under a Harris nomination. They noted that the likelihood of Democrats winning the presidency increased slightly yet remains under 40%.
Looking forward, Goldman previously outlined that taxes are likely to be a primary focus in 2024, especially with the expiration of the Tax Cut and Jobs Act’s personal income tax provisions at the end of 2025. The next administration will have to decide whether to extend these cuts or impose new tax measures.
Key forecasts from Goldman regarding fiscal policy, assuming a Biden victory, include:
– A proposed tax rate of 39.6% on individuals earning $400,000 and above, an increase from the current rates of 35%/37%.
– An increase in the corporate tax rate to 28%, up from 21%, although Goldman expressed skepticism about Congress approving this, suggesting a 25% rate is more likely. In contrast, Trump has pledged to reduce the rate to 20%.
– A proposed increase in the Social Security and Medicare tax to 5% on incomes exceeding $400,000, up from 3.8%.
If Harris becomes the nominee, speculation suggests that potential vice presidential candidates may include Pennsylvania’s Shapiro, Roy Cooper from North Carolina, Andy Beshear of Kentucky, or Arizona’s Senator Mark Kelly.