Goldman Sachs anticipates that Kamala Harris’ economic policies will remain largely consistent if she secures the Democratic presidential nomination. This insight follows President Biden’s recent announcement that he is stepping aside from the race amid mounting pressure post a challenging debate against former President Donald Trump.
Biden has endorsed Harris, who has expressed her intent to pursue candidacy, garnering support from prominent figures such as California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro. Despite this transition, Goldman analysts, led by chief economist Jan Hatzius, suggest there will be minimal changes in the Democratic economic agenda should Harris take the lead.
The succession from Biden to Harris has slightly increased the Democrats’ chances of winning the White House but remains under 40%, as per Goldman Sachs’ estimates. Researchers have indicated that the expiration of key provisions from the Tax Cut and Jobs Act by the end of 2025 will shift the focus toward tax policies in the upcoming year. The outcome of the election will ultimately determine whether tax cuts are extended or if new measures are introduced.
Goldman’s predictions for fiscal policy reveal several key figures. They estimate a potential tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current 35%/37%. For corporate taxation, Biden has proposed a rate of 28%, though Goldman expresses skepticism over Congress agreeing to this, suggesting that a more feasible rate could be 25%. Additionally, the proposed Social Security and Medicare tax on incomes exceeding $400,000 could rise from 3.8% to 5%.
Should Harris become the nominee, speculation surrounds potential vice presidential candidates, including Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, and Arizona Senator Mark Kelly.