Kamala Harris’ economic policies are expected to remain largely unchanged if she becomes the Democratic presidential nominee, according to a recent analysis from Goldman Sachs.
In a significant political development, President Biden announced on Sunday that he has decided to withdraw from the race for the Democratic nomination. This decision follows increasing pressure for him to step aside after a less-than-stellar debate performance against former President Donald Trump, the Republican candidate.
Following Biden’s announcement, he endorsed Vice President Kamala Harris, who has expressed her intention to continue her candidacy. She has already garnered prominent endorsements from several state governors, including Gavin Newsom of California, Josh Shapiro of Pennsylvania, and Phil Murphy of New Jersey. Despite the transition of support from Biden to Harris, analysts at Goldman Sachs believe there will not be a major shift in policy direction.
Goldman economists, led by chief economist Jan Hatzius, stated in a note that they do not anticipate any significant changes to the Democrats’ fiscal and trade policies should Harris become the nominee. The odds of a Democratic win in the upcoming presidential election have increased slightly but remain below 40%, according to the firm’s analysis.
Goldman previously highlighted that taxes will be a major fiscal focus next year, especially as the personal income tax provisions of the Tax Cuts and Jobs Act are set to expire at the end of 2025. The outcome of the election will determine whether these cuts are extended or new taxes are introduced.
Here are some fiscal policy predictions if Biden were to secure a victory:
– The proposed tax rate for individuals making $400,000 or more could rise to 39.6%, up from the current rates of 35% and 37%.
– Biden has suggested a corporate tax rate increase to 28%, up from 21%. However, Goldman analysts expressed skepticism that Congress would agree to this, suggesting a 25% rate is more realistic. In contrast, Donald Trump has pledged to reduce the corporate tax rate to 20%.
– The proposed tax rate for Social Security and Medicare on incomes over $400,000 could rise to 5%, an increase from the current 3.8%.
If Harris secures the nomination, prediction markets indicate that the vice presidential candidates could likely include governors such as Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly of Arizona.