Goldman Sachs has noted that Kamala Harris’ economic policies are unlikely to differ significantly from President Biden’s if she becomes the Democratic presidential nominee. This observation comes in the wake of Biden’s announcement on Sunday that he will not seek re-election, following intense pressure for him to withdraw due to a poor debate performance against former President Donald Trump.
In his statement, Biden endorsed Vice President Kamala Harris, who has expressed her intention to continue her candidacy. She has also secured endorsements from several prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Nonetheless, Goldman analysts, led by chief economist Jan Hatzius, suggest that there will be no major shifts in fiscal and trade policies if Harris assumes the nomination.
Goldman’s analysis indicates that the Democrats’ chances of securing the White House have increased slightly but remain just under 40%. The firm previously noted that tax policies are expected to be a central focus for the upcoming election due to the imminent expiration of key provisions of the Tax Cuts and Jobs Act by the end of 2025. The next administration will determine the continuity of these tax cuts and any potential new tax implement.
In terms of fiscal policy predictions under a potential Biden victory, Goldman Sachs outlined key figures:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, up from the current rates of 35% to 37%.
– A suggested increase in the corporate tax rate to 28%, up from 21%, though analysts believe that a more realistic outcome would be a 25% rate, particularly as Trump aims to lower it to 20%.
– An increase to 5% for the Social Security and Medicare tax rate on incomes exceeding $400,000, up from 3.8%.
Should Harris become the nominee, prediction markets suggest that she may select one of several governors or senators for the vice presidential slot, with potential candidates including Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, and Arizona Senator Mark Kelly.