Goldman Sachs suggests that Kamala Harris’ economic strategy would closely resemble that of President Biden should she secure the Democratic presidential nomination.
Recent polling from Coinbase indicates that Donald Trump and Harris are in a tight race for the support of cryptocurrency voters. This comes on the heels of President Biden’s announcement that he will withdraw from the race for the Democratic nomination. The decision follows mounting pressure for him to step aside after a lackluster debate performance against Trump.
Following his statement, Biden endorsed Harris, who expressed her intent to continue her campaign. Notable endorsements for her candidacy include those from California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. According to Goldman analysts, this shift will not lead to significant changes in policy.
Goldman analysts, led by chief economist Jan Hatzius, stated that they do not anticipate major alterations in fiscal and trade policies if Harris is nominated. The chance of the Democratic Party winning the presidency has slightly increased but remains below 40%.
The firm notes that taxes will be a critical issue in the upcoming year, particularly with the Tax Cut and Jobs Act’s personal income tax provisions set to expire at the end of 2025. Consequently, the next administration will influence the future of these tax cuts.
Goldman’s predictions for fiscal policy in the event of a Biden victory include:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current 35%/37%.
– A corporate tax proposal of 28%, up from the current 21%, although Goldman is doubtful that Congress will agree on this, suggesting that a rate of 25% may be more achievable. In contrast, Trump has pledged to reduce the rate to 20%.
– A proposed increase in the Social Security and Medicare tax rate for incomes over $400,000 to 5%, up from 3.8%.
If Harris is nominated, prediction markets suggest that potential vice presidential candidates could include governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly.