Goldman Sachs suggests that if Kamala Harris becomes the Democratic presidential nominee, her economic policies will not significantly differ from those of President Biden. This analysis follows Biden’s recent announcement that he is withdrawing from the race amid mounting pressure after a challenging debate with former President Donald Trump.
Shortly after his statement, Biden endorsed Vice President Kamala Harris, who expressed her eagerness to continue her candidacy, receiving endorsements from notable figures including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Analysts at Goldman noted that a potential Harris nomination would not lead to major changes in the Democrats’ fiscal and trade policies.
According to Goldman Sachs, the odds of the Democrats winning the presidency under Harris have increased slightly, now just below 40%. The firm previously indicated that the primary fiscal concern for the next year will be taxes, particularly with the expiration of certain provisions from the Tax Cuts and Jobs Act set for the end of 2025. This will leave the next administration to determine which tax cuts to extend and if new taxes will be implemented.
Goldman Sachs provided several predictions regarding fiscal policy if Biden were to win, including:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, up from the current rates of 35% or 37%.
– A suggested corporate tax rate of 28%, an increase from the current 21%, although analysts are doubtful Congress will agree to this, forecasting a more likely outcome of a 25% rate, while Donald Trump has proposed reducing it to 20%.
– A proposed increase in the Social Security and Medicare tax rate on incomes over $400,000 from 3.8% to 5%.
In terms of the vice presidential candidate, prediction markets favor several governors for the position, including Pennsylvania’s Shapiro, North Carolina’s Roy Cooper, Kentucky’s Andy Beshear, and Arizona Senator Mark Kelly.