Goldman Sachs has indicated that if Kamala Harris becomes the Democratic presidential nominee, her economic policies are unlikely to differ significantly from those of President Biden. This comes after Biden announced on Sunday that he would not seek reelection, following increasing pressure to step down due to a poor debate performance against former President Donald Trump.
Biden subsequently endorsed Harris, who expressed her commitment to pursuing the nomination. She received several endorsements from notable figures, including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro. Despite the change in leadership, analysts at Goldman Sachs, led by chief economist Jan Hatzius, predict little alteration in the Democrats’ fiscal and trade policies.
Goldman forecasts that the likelihood of Democrats retaining the White House has increased slightly, yet remains below 40%. They have highlighted that the upcoming year will focus heavily on tax policies, especially with the expiration of certain provisions of the Tax Cuts and Jobs Act at the end of 2025. Whoever wins the election will have to address these tax issues, including the potential extension of the current cuts or the introduction of new taxes.
Specific projections from Goldman include a proposed tax rate of 39.6% for individuals earning over $400,000, a rise from the previous rates, as well as an increase in the corporate tax rate to 28%, though they expressed doubt that Congress would support this and suggested that a rate of 25% is more likely. Additionally, they noted a proposed increase in the Social Security and Medicare tax rate for high earners.
Should Harris secure the nomination, speculation on vice presidential candidates includes potential picks such as Governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Senator Mark Kelly of Arizona.