Goldman Sachs has indicated that Kamala Harris’ economic policies are unlikely to differ significantly from those of President Biden if she becomes the Democratic presidential nominee.
Following a lackluster debate performance against Republican candidate Donald Trump, President Biden announced on Sunday that he would withdraw from the Democratic nomination race as calls for him to step aside grew louder. He swiftly endorsed Vice President Kamala Harris, who expressed her intent to continue her campaign and secured endorsements from prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite this leadership change, policy positions are expected to remain stable.
Goldman analysts, led by chief economist Jan Hatzius, stated in a report that they do not anticipate any substantial shifts in the Democrats’ fiscal and trade policy agenda should Harris be nominated. The likelihood of Democrats winning the White House has increased slightly, now estimated at just under 40%, according to the firm.
Researchers at Goldman pointed out that taxes will be a primary focus in the upcoming year, particularly as provisions of the Tax Cuts and Jobs Act are set to expire at the end of 2025. This means that the victor of the election will have the authority to determine the fate of these tax cuts and any potential new tax initiatives.
Goldman’s projections for fiscal policy should Biden win include the following:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35%/37%.
– A proposed corporate tax rate of 28%, up from the current 21%. However, Goldman expressed doubts that Congress would agree to this figure, suggesting that a 25% rate is more realistic. In contrast, Trump has proposed reducing the rate to 20%.
– An increase in the tax rate for Social Security and Medicare on incomes exceeding $400,000, from 3.8% to 5%.
Should Harris secure the nomination, prediction markets favor governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly for the vice presidential position.