Kamala Harris’ economic policies are expected to remain largely unchanged if she becomes the Democratic presidential nominee, according to analysts at Goldman Sachs.
President Biden announced on Sunday that he will not seek reelection, following increased pressure for him to step aside after a lackluster debate performance against former President Donald Trump. Shortly after, Biden endorsed Vice President Kamala Harris, who expressed her intention to continue her campaign. She also received endorsements from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy.
Despite the leadership change, Goldman Sachs does not anticipate significant shifts in the Democratic Party’s fiscal and trade policy agenda with Harris at the helm. Analysts, led by chief economist Jan Hatzius, indicated that the odds of a Democratic victory in the upcoming election have increased slightly but still remain under 40%.
Goldman previously noted that tax policy will be a central focus in the coming year, especially with the expiration of provisions from the Tax Cut and Jobs Act looming at the end of 2025. The next president will play a crucial role in determining the future of these tax cuts and any potential new tax policies.
The firm provided specific forecasts for tax policy should Biden win. They predict a tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% and 37%. They also anticipate a proposed corporate tax rate of 28%, up from 21%, though they are skeptical that Congress will approve this, suggesting a 25% rate is more feasible. Additionally, Biden plans to increase the Social Security and Medicare tax rate on incomes exceeding $400,000 to 5%, from the current 3.8%.
If Harris is nominated, speculation is rising over potential candidates for the vice presidential position, with names like Governor Shapiro, North Carolina’s Roy Cooper, Kentucky’s Andy Beshear, and Arizona Senator Mark Kelly appearing as likely contenders.