Goldman Sachs suggests that there will be minimal changes to economic policies if Vice President Kamala Harris becomes the Democratic presidential nominee following President Biden’s exit from the race. Biden officially stepped down from his candidacy after receiving intense pressure following a challenging debate with former President Donald Trump, and subsequently endorsed Harris.
Harris has expressed her commitment to continue her campaign, securing endorsements from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs believes that the Democratic agenda concerning fiscal and trade policies will remain largely unchanged under Harris’ leadership.
In terms of electoral prospects, transitioning from Biden to Harris has slightly improved the Democrats’ chances of retaining the presidency, increasing the odds to just under 40%. Analysts at Goldman Sachs have pointed out that taxes will play a significant role in the upcoming election, particularly with the potential expiration of certain tax provisions set for the end of 2025.
Specific forecasts for fiscal policy indicate that there are discussions regarding tax increases, particularly for high earners. The proposed tax rate for individuals earning over $400,000 may rise to 39.6%, compared to current rates, with corporate tax rates also expected to increase from 21% to potentially 28%. Conversely, the Republican nominee, Donald Trump, has indicated plans to reduce the corporate tax rate to 20%.
Looking ahead, if Harris secures the nomination, speculation regarding potential vice presidential candidates includes several governors and senators who may join her on the ticket.
This situation illustrates how the Democratic Party is attempting to maintain continuity in its policy approach while adapting to leadership changes. As Harris continues to galvanize support, there is hope that her candidacy could engage a broader base of voters concerned about tax structures and fiscal responsibility.
Summary: Goldman Sachs predicts that Kamala Harris’ economic strategies will closely align with Biden’s, even after his endorsement of her candidacy. With elections looming, discussions are heating up around tax reforms, and several potential vice presidential candidates have emerged. The alignment of fiscal policies may offer stability to voters during this period of transition.