In the wake of President Biden’s announcement to withdraw from the Democratic nomination race—following criticism of his recent debate performance—Vice President Kamala Harris has confirmed her intent to run for president. Biden has officially endorsed Harris, who has garnered support from prominent figures including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro.
According to analysts from Goldman Sachs, Harris’s economic policies are expected to closely align with Biden’s, suggesting that a shift in the Democratic fiscal and trade policy agenda will be minimal if she becomes the nominee. Goldman Sachs chief economist Jan Hatzius noted that the prospects of Democrats retaining the White House have improved slightly, though they still estimate the likelihood to be just under 40%.
The forecast shared by Goldman highlights significant fiscal issues that will need to be addressed regardless of the election outcome. Key points include potential increases in tax rates for higher earners and corporations. Goldman predicts that Democrats might propose a tax rate of 39.6% for individuals earning over $400,000, an increase from the current 35%-37%. For corporations, a hike to 28% is proposed, although Goldman expresses skepticism about Congress agreeing to such an increase, predicting a more feasible rate of around 25%.
Furthermore, the report discusses a proposed tax on incomes over $400,000 for Social Security and Medicare, suggesting an increase from 3.8% to 5%.
If Harris secures the nomination, speculation mounts about potential vice presidential candidates, including Governors Shapiro and Cooper, as well as Senator Mark Kelly.
This situation presents an opportunity for Harris to articulate a clear vision for her campaign that can resonate with voters, focusing on continuity while also embracing innovation in economic policy.
Summary: Vice President Kamala Harris is set to run for president after President Biden’s withdrawal from the race, with Goldman Sachs projecting her economic policies to mirror Biden’s. High-profile endorsements have bolstered her campaign while the analysts expect minimal shifts in the Democrats’ fiscal agenda regardless of the nomination outcome.