As the political landscape shifts, Goldman Sachs suggests that if Vice President Kamala Harris becomes the Democratic presidential nominee, her economic policies are unlikely to differ significantly from those of President Biden.
This comes after President Biden announced he would not seek re-election, following mounting pressure for him to step down following a challenging debate with former President Donald Trump. Shortly after his announcement, Biden endorsed Harris, who has expressed her intent to continue her campaign and has garnered support from notable figures including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro.
Goldman Sachs analysts, led by economist Jan Hatzius, indicated that the Democratic Party’s fiscal and trade policy agenda is expected to remain consistent, despite Harris potentially leading the ticket. They estimate that the Democrats’ chances of winning the White House have improved slightly but are still below 40%.
In a previous report, Goldman identified that taxes would emerge as a significant focus in the upcoming election, particularly as provisions from the Tax Cut and Jobs Act are set to expire by the end of 2025. This means the next president will play a key role in deciding tax extensions and potential new taxes.
Goldman’s projections for fiscal policy in the event of a Biden victory include a potential tax rate of 39.6% on individuals earning over $400,000, an increase in the corporate tax rate to 28%, and a proposed 5% tax on higher incomes for Social Security and Medicare.
If Harris secures the nomination, prediction markets suggest that the most likely candidates for the vice presidency include Governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Senator Mark Kelly from Arizona.