Goldman Sachs analysts predict that Vice President Kamala Harris’ economic policies will largely mirror those of President Biden if she becomes the Democratic presidential nominee. This assessment follows Biden’s announcement on Sunday that he is withdrawing from the race for the Democratic nomination amid increasing pressure for him to step aside after a challenging debate against former President Donald Trump.
Biden subsequently endorsed Harris, who has expressed her commitment to running for president. She has also garnered support from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts at Goldman Sachs suggest that there won’t be significant changes in policy under Harris.
In a note released on Sunday, chief economist Jan Hatzius and his team stated that the Democrats’ fiscal and trade agenda is unlikely to shift considerably with Harris as the nominee. They indicated that while the chances of Democrats retaining the presidency have risen slightly, they still estimate those odds to be under 40%.
Goldman Sachs also highlighted that taxes will become a primary issue in the upcoming election, particularly with the planned expiration of individual tax cuts from the Tax Cuts and Jobs Act in 2025. This will place significant importance on how the next administration approaches tax policy, including decisions on extending existing cuts or implementing new taxes.
Key forecasts provided by Goldman for fiscal policy under a potential Biden win include a proposed tax rate of 39.6% on individuals earning over $400,000, an increase in the corporate tax rate to 28%, and a revised Social Security and Medicare tax rate of 5% on high earners. The firm expressed doubt that Congress would endorse the full proposed corporate tax rate, suggesting a possible compromise at around 25%.
Additionally, if Harris secures the nomination, potential candidates for the vice presidency could include Governors Shapiro, Roy Cooper from North Carolina, Andy Beshear from Kentucky, and Senator Mark Kelly from Arizona.