In a recent analysis, Goldman Sachs suggests that Vice President Kamala Harris’ economic policies will not significantly differ from those of President Biden, should she secure the Democratic presidential nomination.
President Biden announced his withdrawal from the race for the Democratic nomination after facing mounting pressure to step down following a challenging debate against former President Donald Trump. Shortly after, Biden endorsed Harris, who confirmed her intention to seek the presidency and garnered support from notable figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts expect continuity in policy, rather than major changes.
Goldman Sachs’ chief economist, Jan Hatzius, indicated in a note that they do not anticipate any meaningful shifts in the Democrats’ fiscal and trade policy even if Harris becomes the nominee. The analysts have slightly increased the odds of a Democratic victory in the upcoming election to just below 40%.
Research from Goldman Sachs highlighted that taxes are likely to become the focal point of fiscal policy discussions in the next year, particularly with the impending expiration of personal income tax provisions from the Tax Cut and Jobs Act at the end of 2025. The outcome of the election will play a crucial role in determining whether these tax cuts are extended or if new taxes are implemented.
Specific predictions from Goldman Sachs regarding fiscal policy under a Biden administration include a proposed tax rate increase to 39.6% for individuals earning $400,000 or more, an increase of the corporate tax rate to 28%, and raising the Social Security and Medicare tax rate on incomes exceeding $400,000 to 5%.
Should Harris assume the nomination, speculation about her vice presidential pick points to several potential candidates, including Pennsylvania Governor Josh Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, and Arizona Senator Mark Kelly.