Goldman Sachs analysts have indicated that the economic plans of Vice President Kamala Harris are unlikely to differ significantly from those of President Joe Biden if she becomes the Democratic presidential nominee. This assessment follows Biden’s recent announcement that he would be stepping aside for the nomination after facing considerable pressure to do so, particularly in light of a less-than-stellar debate performance against Republican candidate Donald Trump.
Biden’s endorsement of Harris for candidacy was met with support from prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs suggested that the transition from Biden to Harris would not bring about a meaningful shift in fiscal and trade policy for the Democrats.
The financial firm noted that while Harris’s nomination might marginally improve the Democrats’ chances of retaining the presidency—bringing the likelihood to just below 40%—the core economic strategies would largely remain intact. With significant fiscal milestones approaching, such as the expiration of key tax provisions from the Tax Cuts and Jobs Act at the end of 2025, the upcoming election outcome will be critical in determining future tax policies.
Goldman’s forecast for tax policy under a potential Biden administration includes a proposed tax rate for high earners of 39.6%—up from the current 35%/37%—and an increase in the corporate tax rate to 28% from 21%. However, they express skepticism that Congress would agree to such increases, suggesting a more likely outcome of around 25%. Additionally, the firm has projected an increase in the Social Security and Medicare tax rate for the wealthiest earners from 3.8% to 5%.
If elected, Harris may choose from a range of potential candidates for the vice presidency, with strong contenders including Governors Shapiro and Roy Cooper, Kentucky’s Andy Beshear, and Senator Mark Kelly of Arizona.
This potential change in leadership presents a unique opportunity for the Democratic party to build on existing policies while still appealing to a diverse voter base. With Harris’s proven track record and support from established leaders, her candidacy could inspire new energy and ideas while maintaining continuity in fiscal strategy, paving the way for a stable economic future.