Goldman Sachs indicates that Kamala Harris’ economic policies are unlikely to differ significantly from those of President Biden if she becomes the Democratic presidential nominee.
Biden announced on Sunday that he would not seek re-election, following mounting pressure after a less-than-stellar debate performance against Donald Trump, the Republican candidate and former president. Shortly afterward, he endorsed Harris, who expressed her intention to pursue the nomination and received several prominent endorsements from figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy.
Goldman analysts, led by chief economist Jan Hatzius, stated that they do not expect a meaningful change in the Democrats’ fiscal and trade policy agenda with Harris as the nominee. Although the shift could slightly improve Democrats’ chances of winning the White House, they remain under 40%, according to Goldman.
The firm also noted that the expiration of certain tax provisions under the Tax Cut and Jobs Act at the end of 2025 will make taxes a key issue in the upcoming election, impacting whoever succeeds in winning the presidency.
Goldman Sachs outlined some fiscal policy forecasts based on a potential Biden victory:
– A possible tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% and 37%.
– A proposed corporate tax rate of 28%, increased from the current 21%, though Goldman expresses skepticism about Congress agreeing to this, suggesting a 25% rate might be more feasible. Meanwhile, Trump has committed to lowering the rate to 20%.
– A proposed increase in the Social Security and Medicare tax rate on incomes beyond $400,000 from 3.8% to 5%.
If Harris secures the nomination, prediction markets suggest she could choose from several potential vice presidential candidates, including Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly.