Goldman Sachs suggests that if Kamala Harris becomes the Democratic presidential nominee, her economic plans will not significantly differ from those of President Biden. This comes after Biden announced he will not seek re-election, following increasing calls for him to step aside due to concerns over his debate performance against Donald Trump.
Following Biden’s announcement, he endorsed Vice President Harris, who expressed her commitment to her campaign and gained notable endorsements from governors such as Gavin Newsom of California, Josh Shapiro of Pennsylvania, and Phil Murphy of New Jersey. However, Goldman Sachs predicts that this leadership change will not greatly alter the Democratic Party’s fiscal and trade policy direction.
Goldman analysts, led by chief economist Jan Hatzius, indicated that the policy agenda would likely remain consistent, and that the chances of a Democratic victory in the presidential election are slightly under 40%. They noted that taxes will be a significant focal point in the upcoming year, especially with the expiration of certain provisions of the Tax Cuts and Jobs Act approaching at the end of 2025. This situation will present the next president with the responsibility of deciding the future of these cuts and any potential new taxes.
The firm outlined several fiscal policy predictions if Biden were to win, including a potential tax rate of 39.6% for individuals earning $400,000 or more, an increase in the corporate tax rate to 28%, and a raise in the Social Security and Medicare tax on higher incomes. If Harris emerges as the nominee, speculation suggests that the vice presidential nomination may go to candidates like Josh Shapiro, Roy Cooper, Andy Beshear, or Mark Kelly.