Goldman Sachs analysts believe that Kamala Harris’ economic policy plans will not significantly differ from those of President Biden if she becomes the Democratic presidential nominee. This perspective follows Biden’s announcement that he would withdraw from the race for the Democratic nomination amidst increasing pressure to step down after a problematic debate performance against former President Donald Trump.
Biden has endorsed Vice President Harris, who is now set to move forward with her candidacy and has garnered endorsements from notable figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs predicts that the Democratic fiscal and trade policies will remain largely unchanged under Harris’s leadership.
Goldman analysts, led by chief economist Jan Hatzius, indicated in a recent note that Harris’s nomination may slightly improve the Democrats’ chances of securing the presidency, though the likelihood remains just below 40%. They emphasized that the upcoming election will play a crucial role in determining the future of tax policies, especially as the provisions of the Tax Cut and Jobs Act are set to expire at the end of 2025.
Key fiscal policy forecasts under a potential Biden victory include proposals such as a 39.6% tax rate for individuals earning $400,000 or more, an increase in the corporate tax rate from the current 21% to 28%, and raising the Social Security and Medicare tax rate on high earners. While there may be challenges in passing these proposals through Congress, Goldman notes that a 25% corporate tax rate may be more feasible.
In the event that Harris secures the nomination, speculation about potential vice presidential candidates includes Governors Shapiro from Pennsylvania, Roy Cooper from North Carolina, Andy Beshear from Kentucky, and Senator Mark Kelly from Arizona.