In a recent analysis, Goldman Sachs has indicated that Vice President Kamala Harris’ economic policies would likely remain similar if she becomes the Democratic presidential nominee.
This follows President Biden’s announcement on Sunday that he is withdrawing from the race for the Democratic nomination due to intense pressure after a lackluster debate performance against former President Donald Trump. In his statement, Biden endorsed Harris, who has expressed her intention to continue her candidacy and has received significant endorsements from notable figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy.
Goldman Sachs analysts, led by chief economist Jan Hatzius, noted that they do not anticipate substantial changes in the fiscal and trade policy agendas should Harris take the lead. They suggest that the probability of Democrats winning the White House has increased slightly but still stands at just below 40%.
The firm had previously indicated that tax policy will be a major issue in the coming year, especially with the expiration of personal income tax provisions from the Tax Cuts and Jobs Act set for the end of 2025. The outcome of the election will determine whether these tax cuts are extended and if new taxes or cuts are introduced.
Goldman’s key forecasts for fiscal policy under a potential Biden administration include:
– A proposed tax rate of 39.6% on individuals earning $400,000 or more, an increase from the current rates of 35% and 37%.
– A suggested corporate tax rate of 28%, up from the current 21%. Analysts are skeptical that Congress will agree to this, predicting that a 25% rate is more likely. In contrast, Trump plans to reduce the corporate tax rate to 20%.
– An increase in the proposed Social Security and Medicare tax rate for incomes over $400,000, from 3.8% to 5%.
Should Harris secure the nomination, speculation surrounds potential vice presidential candidates, with governors Shapiro from Pennsylvania, Roy Cooper from North Carolina, Andy Beshear from Kentucky, and Senator Mark Kelly from Arizona being considered the front-runners.