Goldman Sachs has analyzed the economic plans of Vice President Kamala Harris, indicating that if she becomes the Democratic presidential nominee, her policies are unlikely to differ significantly from those of President Biden. This comes after Biden announced his withdrawal from the race amid increasing pressure for him to step aside following a weak debate performance against former President Donald Trump.
In his statement, Biden endorsed Harris, who is eager to move forward with her candidacy. She has garnered support from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts at Goldman Sachs believe that the transition from Biden to Harris will not lead to major changes in the Democratic Party’s fiscal and trade policies.
Goldman economists, led by Jan Hatzius, noted that the odds of a Democratic victory in the upcoming presidential election have increased slightly with Harris as the nominee, though they still estimate the probability to be under 40%. The firm had previously indicated that taxes would be a key fiscal issue in the coming year, particularly concerning the expiration of personal income tax cuts established by the Tax Cut and Jobs Act, set to lapse at the end of 2025. The incoming administration will determine the future of these cuts and the potential for new taxes.
The following are some fiscal policy forecasts from Goldman Sachs if Biden were to secure re-election:
– 39.6%: Proposed tax rate for individuals earning $400,000 or more, an increase from the current 35%/37%.
– 28%: Biden’s suggested corporate tax rate, up from the current 21%, though Goldman analysts expressed skepticism about Congress agreeing on this rate, suggesting a more likely outcome of 25%. In contrast, Donald Trump has proposed lowering this rate to 20%.
– 5%: Proposed increase in the Social Security and Medicare tax rate for incomes exceeding $400,000, from 3.8% at present.
Should Harris secure the nomination, speculation surrounds potential vice presidential candidates, including Governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Senator Mark Kelly of Arizona.