According to analysts at Goldman Sachs, if Vice President Kamala Harris becomes the Democratic presidential nominee, her economic agenda is unlikely to differ significantly from that of President Biden. This comes in light of Biden’s recent announcement that he is withdrawing from the race for the Democratic nomination, following mounting pressure for him to step aside after a challenging debate against former President Donald Trump.
After Biden’s endorsement of Harris, she confirmed her intention to pursue the nomination and received notable backing from several governors, including Gavin Newsom of California, Josh Shapiro of Pennsylvania, and Phil Murphy of New Jersey. However, Goldman Sachs anticipates that there will be minimal changes to the Democrats’ fiscal and trade policies if Harris secures the nomination.
Goldman Sachs analysts, led by chief economist Jan Hatzius, noted that the likelihood of Democrats winning the White House has improved slightly but still remains just below 40%. They reiterated that with the expiration of personal income tax provisions from the Tax Cuts and Jobs Act approaching the end of 2025, tax policy will be a central issue in the upcoming election.
Their forecasts for fiscal policies under a potential Biden administration include a proposed tax rate of 39.6% on individuals earning $400,000 or more, an increase in the corporate tax rate to 28%, and a proposed Social Security and Medicare tax rate of 5% on higher incomes. Goldman expressed skepticism about the feasibility of the proposed corporate tax rate and suggested a more realistic outcome could be around 25%.
Should Harris emerge as the nominee, speculation points to several possible candidates for the vice presidential slot, including Governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Senator Mark Kelly of Arizona.