Goldman Sachs has indicated that there would not be significant differences in economic policies if Kamala Harris were to become the Democratic presidential nominee. This assessment comes in light of President Biden’s recent announcement that he would withdraw from the race, following criticisms of his debate performance against former President Donald Trump.
After Biden’s withdrawal, he endorsed Vice President Harris, who has confirmed her intention to continue her campaign. She has already garnered several prominent endorsements, including those from California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite the potential change in leadership, analysts from Goldman predict that the Democratic fiscal and trade policy agenda will remain largely consistent.
Goldman Sachs noted that while the shift to Harris might increase the Democrats’ chances of winning the White House slightly, those odds still hover at just below 40%. The firm previously highlighted that tax policies will be a primary concern heading into 2024, especially as the personal income tax provisions from the Tax Cut and Jobs Act are set to expire at the end of 2025. The outcome of the election will determine whether these tax cuts are extended or if new taxes are introduced.
In their projections for fiscal policy under a possible Biden scenario, Goldman outlined several noteworthy figures: a proposed tax rate of 39.6% for individuals earning over $400,000, a suggested corporate tax rate increase to 28% from the current 21%, and a higher Social Security and Medicare tax rate of 5% for incomes above $400,000, up from 3.8%.
If Kamala Harris secures the nomination, speculation regarding her running mate includes governors such as Josh Shapiro from Pennsylvania, Roy Cooper from North Carolina, Andy Beshear from Kentucky, and Arizona Senator Mark Kelly.