Goldman Sachs indicates that Vice President Kamala Harris’ economic policies, should she become the Democratic presidential nominee, will largely align with those of President Biden. This assessment follows President Biden’s announcement that he will not seek re-election due to mounting calls for him to step down after a lackluster debate performance against former President Donald Trump.
In a swift turn of events, Biden endorsed Harris, who expressed her commitment to pursuing the nomination. She has since received support from notable figures, including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro. However, analysts at Goldman Sachs predict that if Harris takes the lead, there won’t be significant changes to the Democratic fiscal and trade agenda.
Goldman’s insights suggest a modest increase in the chances of the Democrats securing the White House, estimating them at just under 40%. They highlight that tax policy will be a major subject in the upcoming election cycle, particularly as the Tax Cut and Jobs Act’s personal income tax provisions are set to expire at the end of 2025. Voters will play a crucial role in determining whether tax cuts are extended or if new taxes will be introduced.
The economic forecast outlines specific tax policy adjustments under a potential Biden victory, including a proposed income tax rate of 39.6% for individuals earning over $400,000 and a corporate tax rate increase to 28%. Goldman analysts express skepticism about Congress’s willingness to accept such tax hikes, predicting a more likely corporate tax rate of 25%. Additionally, there’s a suggestion to increase Social Security and Medicare tax rates on high-income earners.
In terms of Harris’ potential running mate, speculation indicates that Democrats may consider governors such as Josh Shapiro from Pennsylvania, Roy Cooper from North Carolina, Andy Beshear from Kentucky, or Senator Mark Kelly from Arizona.
In summary, this analysis reflects ongoing political dynamics as the Democratic Party prepares for the next election, highlighting how economic policies may remain stable even with leadership changes. The focus on tax policies underscores the importance of economic discussions in shaping voter perceptions and priorities.
With the potential for a new Democratic ticket, there remains hope for energized campaigning and fresh dialogue on economic issues that resonate with voters, fostering a constructive debate in the lead-up to the elections.