Goldman Sachs suggests that Vice President Kamala Harris’ economic policies would not significantly differ from those of President Biden if she becomes the Democratic presidential nominee.
Following a challenging debate performance against former President Donald Trump, President Biden announced on Sunday that he would withdraw from the race for the Democratic nomination. He subsequently endorsed Harris, who confirmed her intention to run and received endorsements from several prominent figures, including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro.
Goldman analysts, led by chief economist Jan Hatzius, stated that there would be little change in the Democrats’ fiscal and trade policy agenda if Harris is nominated. The likelihood of Democrats winning the White House increased slightly, but remains below 40%, according to Goldman.
The firm previously indicated that tax policy would become a key focus in the upcoming year, especially with the expiration of certain personal income tax provisions from the Tax Cuts and Jobs Act nearing at the end of 2025. The next president will have to decide whether to extend these cuts or implement new taxes.
Goldman provided specific forecasts regarding potential fiscal policy under a Biden-led administration:
– 39.6%: Proposed tax rate for individuals earning $400,000 or more, up from the current 35% or 37%.
– 28%: Proposed corporate tax rate, an increase from the current 21%. Goldman expressed skepticism that Congress would agree to this, suggesting a more realistic rate might be around 25%. In contrast, Trump aims to reduce the rate to 20%.
– 5%: Proposed increase in Social Security and Medicare tax for incomes over $400,000, up from the current 3.8%.
If Harris is crowned the nominee, speculation suggests potential vice-presidential candidates could include Pennsylvania’s Josh Shapiro, North Carolina’s Roy Cooper, Kentucky’s Andy Beshear, or Arizona Senator Mark Kelly.