Kamala Harris’ economic plans are expected to remain largely unchanged if she secures the Democratic presidential nomination, according to an analysis by Goldman Sachs. This comes in the wake of President Biden announcing on Sunday that he is withdrawing from the race, following intense pressure for him to step down after a less-than-stellar debate performance against former President Donald Trump.
After Biden’s announcement, he endorsed Vice President Kamala Harris, who has expressed her commitment to pursuing the nomination and has garnered significant endorsements from prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, the policy landscape is expected to remain stable.
Goldman Sachs analysts, led by chief economist Jan Hatzius, noted that they do not anticipate substantial changes to the Democrats’ fiscal and trade policy agenda should Harris become the nominee. They also mentioned that the likelihood of Democrats winning the White House has increased slightly but is still below 40%.
The firm previously highlighted that tax policy will be a key focus in the coming year, especially with the approaching expiration of personal income tax cuts established by the Tax Cuts and Jobs Act at the end of 2025. This means the next president will decide the future of these cuts and the potential for new taxes or reductions.
Goldman’s projections for fiscal policy under a potential Biden victory include:
– A proposed tax rate of 39.6% on individuals earning $400,000 or more, an increase from the current 35%/37%.
– A suggested corporate tax rate of 28%, up from the existing 21%. However, Goldman expressed skepticism that Congress would agree to this rate, indicating that a 25% rate is more plausible, especially as Trump has promised to lower it to 20%.
– A proposed increase in the Social Security and Medicare tax rate on incomes over $400,000 from 3.8% to 5%.
Should Harris emerge as the Democratic nominee, speculation indicates that potential vice presidential candidates may include governors like Josh Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly.