As President Biden withdraws from the race for the Democratic nomination, Vice President Kamala Harris is set to take the lead as the likely candidate. This shift comes after increasing pressure for Biden to step back following a rocky debate against former President Donald Trump.
In the wake of his announcement, Biden has endorsed Harris, who has expressed her commitment to proceed with her campaign. She has already garnered support from influential figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, according to analysts at Goldman Sachs, Harris’ economic agenda would not differ significantly from Biden’s.
Goldman Sachs’ chief economist, Jan Hatzius, noted that the Democratic fiscal and trade policy is expected to remain largely unchanged if Harris becomes the nominee. While the transition from Biden to Harris is likely to increase the Democrats’ chances of winning the presidency by a few percentage points, they will still face obstacles, with the odds remaining just below 40%.
The firm has highlighted that taxes will be a major focus in the upcoming year, particularly with the expiration of certain provisions from the Tax Cut and Jobs Act set for the end of 2025. The upcoming election will determine the future of these tax cuts and any potential new tax measures.
Goldman Sachs provided key forecasts related to fiscal policy under a potential Biden victory:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more.
– An increase in the corporate tax rate to 28%, from the current 21%, although Goldman is skeptical of this figure being accepted in Congress, suggesting a more likely outcome of 25%.
– A proposed tax rate of 5% on Social Security and Medicare for incomes exceeding $400,000, up from the current 3.8%.
If Harris is nominated, various prediction markets indicate that the vice presidential candidates could include Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly.