Goldman Sachs predicts that Kamala Harris’ economic policies will largely mirror those of President Biden if she becomes the Democratic presidential nominee. This comes after Biden announced on Sunday that he would no longer seek the nomination, following increasing pressure after his debate performance against Republican contender Donald Trump.
Biden publicly endorsed Vice President Harris, who expressed her intention to continue her campaign. She has already garnered support from prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman analysts, led by chief economist Jan Hatzius, believe that there will not be a significant shift in the fiscal and trade policy agenda should Harris take the lead.
According to Goldman, the chances of Democrats securing the White House would improve slightly with Harris as the nominee, although the probability remains under 40%. The firm’s earlier analysis noted that taxation will be a primary fiscal concern in the upcoming year, particularly as the personal income tax provisions of the Tax Cuts and Jobs Act are set to expire at the end of 2025. The eventual winner of the election will have to determine the fate of these tax cuts and propose any changes.
Goldman Sachs provided forecasts concerning fiscal policy under a potential Biden win:
– 39.6%: The proposed tax rate for individuals earning $400,000 or more, up from the current rates of 35% and 37%.
– 28%: Biden’s suggested corporate tax rate, which is an increase from the existing 21%. However, Goldman doubts Congress would support this rate and suggests that a 25% rate is more plausible, especially with Trump proposing a reduction to 20%.
– 5%: Biden’s proposed increase to the Social Security and Medicare tax rate for incomes exceeding $400,000, up from the current rate of 3.8%.
Should Harris become the nominee, speculation suggests that potential vice presidential candidates may include Governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly.