Goldman Sachs suggests that if Kamala Harris becomes the Democratic presidential nominee, her economic policies are unlikely to diverge significantly from those of President Biden. This comes after Biden announced on Sunday that he would not seek re-election, following a lackluster debate performance against former President Donald Trump.
In his announcement, Biden endorsed Harris, who expressed her intention to run for the presidency. She has since garnered support from several prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite this transition, analysts believe that the shift will not result in substantial changes to the Democratic agenda.
Goldman Sachs, in a note penned by chief economist Jan Hatzius, stated that the Democrats’ fiscal and trade policies would likely remain consistent, even if Harris is nominated. They estimated that the chances of Democrats securing the White House would improve slightly, but still linger below 40%.
Analysts indicated that tax policy will be a key focus in the upcoming election, particularly with the scheduled expiration of certain provisions from the Tax Cut and Jobs Act at the end of 2025. The outcome of the election will dictate whether the current tax cuts are extended or if new taxes are implemented.
Key projections from Goldman Sachs regarding potential fiscal policy under a Biden administration include a proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase in the corporate tax rate to 28% from the current 21%, and a rise in the Social Security and Medicare tax rate for high incomes from 3.8% to 5%.
If Harris becomes the Democratic nominee, speculation indicates that potential vice-presidential candidates could include Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly.