Goldman Sachs has indicated that Kamala Harris’ economic policies are unlikely to differ significantly from those of President Biden if she becomes the Democratic presidential nominee. This insight follows President Biden’s recent announcement that he would withdraw from the race amid growing pressure after a challenging debate against former President Donald Trump.
In his statement, Biden expressed his endorsement for Vice President Harris, who has confirmed her intent to continue her campaign. She has already received several endorsements from prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, experts believe that the shift in leadership will not lead to major changes in policy.
Goldman analysts, under the guidance of chief economist Jan Hatzius, noted that they do not anticipate a significant alteration in the Democrats’ fiscal and trade policy agenda if Harris is nominated. The analysts projected a slight increase in the Democrats’ chances of securing the presidency, estimating them at just below 40%.
The firm also highlighted that the upcoming expiration of personal income tax provisions from the Tax Cut and Jobs Act in 2025 will make taxes a key fiscal focus for whoever wins the election. The decisions will revolve around possible extensions of tax cuts and the introduction of new taxes.
Goldman Sachs provided several forecasts for potential fiscal policies under a Biden administration:
– A proposed tax rate of 39.6% on individuals earning $400,000 or more, an increase from the current rates of 35% and 37%.
– A corporate tax rate proposed at 28%, up from the current 21%, although analysts doubt Congress would agree, suggesting a 25% rate as more likely. In contrast, Donald Trump has pledged to reduce the corporate tax rate to 20%.
– An increase in the Social Security and Medicare tax rate on incomes over $400,000 to 5%, up from the current 3.8%.
If Harris becomes the nominee, potential candidates for the vice presidential position include Governors Josh Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Senator Mark Kelly of Arizona.