Goldman Sachs has indicated that if Kamala Harris secures the Democratic presidential nomination, her economic strategies are unlikely to differ significantly from those of President Biden. This assessment follows Biden’s announcement that he is stepping aside from the race, prompted by increasing pressure after a challenging debate against Republican candidate Donald Trump.
In a swift response, Biden endorsed Vice President Harris, who affirmed her intention to continue her campaign, garnering support from notable figures including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs’ analysts, led by chief economist Jan Hatzius, predict that the Democrats’ fiscal and trade policy agenda will not experience substantial changes under Harris’ leadership.
Biden’s exit and Harris’ entry into the race have slightly increased the Democrats’ chances of winning the White House, although views of success remain just below 40%, according to Goldman’s analysis.
The firm has also highlighted an impending focus on taxes in the next fiscal year, as the personal income tax provisions from the Tax Cut and Jobs Act are set to expire at the end of 2025. The next president will need to decide on the future of these cuts and any potential new tax initiatives.
Goldman has laid out several key projections regarding fiscal policy should Biden win the election:
– A proposed tax rate of 39.6% on individuals earning $400,000 or more, up from 35%/37%.
– A corporate tax rate set at 28%, an increase from the current 21%, though Goldman expresses doubt that Congress would agree, suggesting that a rate closer to 25% is more feasible.
– A Social Security and Medicare tax rate increase on incomes exceeding $400,000, climbing from 3.8% to 5%.
If Harris is confirmed as the nominee, speculation is rising regarding potential vice presidential candidates, with governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Arizona Senator Mark Kelly seen as strong contenders.