Goldman Sachs has indicated that the economic plans of Vice President Kamala Harris are unlikely to differ significantly from those of President Biden, especially now that he is stepping back from the Democratic presidential race. Following Biden’s shaky debate performance against former President Donald Trump, he announced his withdrawal from the nomination and subsequently endorsed Harris, who has expressed her intent to run for president.
Prominent endorsements for Harris have come from influential figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite this political transition, Goldman Sachs analysts do not foresee a meaningful shift in the Democrats’ fiscal and trade policies under a Harris presidency. Chief economist Jan Hatzius noted that the odds of a Democratic victory in the upcoming elections have seen a slight increase, now estimated to be just under 40%.
Looking ahead, Goldman analysts have identified key aspects of the fiscal landscape, particularly the imminent expiration of personal income tax provisions from the Tax Cuts and Jobs Act at the end of 2025, which will require decisions from the next administration regarding tax extensions or new cuts.
Goldman’s predictions for tax policy under a Democratic administration include considerations for a new tax rate of 39.6% on individuals earning over $400,000 and a proposed increase in the corporate tax rate to 28%. However, the firm expressed skepticism that Congress would agree to such increases, suggesting a more realistic outcome would maintain the rate closer to 25%. Additionally, Biden’s plan proposes raising the tax for Social Security and Medicare on similar high-earning individuals from 3.8% to 5%.
If Harris secures the nomination, potential candidates for the vice-presidential position could include governors and senators such as Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona’s Mark Kelly.
As the political landscape evolves, there might be a continued focus on economic issues that affect the everyday lives of Americans, fostering a sense of stability and continuity that could reassure voters looking for experienced leadership.
In summary, Harris’s transition to candidacy seems to come with strong political backing, yet the core economic policies are expected to remain consistent with Biden’s, setting a familiar tone for Democratic economic strategy as the election approaches.