Goldman Sachs believes that Kamala Harris’ economic plans will not differ significantly if she becomes the Democratic presidential nominee.
With recent polls indicating a close race between Donald Trump and Kamala Harris among crypto voters, President Biden announced on Sunday that he would withdraw from the Democratic race following increasing pressure after a less-than-stellar debate performance against Trump. In his statement, Biden endorsed Vice President Harris, who has confirmed her intention to pursue her candidacy and has received several high-profile endorsements, including from California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy.
Despite the leadership change, Goldman analysts, led by chief economist Jan Hatzius, suggest that there will be minimal changes in the Democrats’ fiscal and trade policies if Harris becomes the nominee. The probability of Democrats securing the White House has increased slightly, remaining just under 40%, according to Goldman.
Looking ahead, Goldman researchers indicated that tax policy will take center stage next year as provisions of the Tax Cuts and Jobs Act are set to expire at the end of 2025. The outcome of the upcoming election will influence decisions on how extensively the tax cuts will be prolonged and whether additional taxes or cuts will be introduced.
Goldman Sachs also provided insight into potential fiscal policies under a Biden victory, which included a proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current 35%/37%. Additionally, President Biden proposed raising the corporate tax rate to 28%, though Goldman remains doubtful that Congress would agree, considering a 25% rate more realistic. There is also a proposed increase in the Social Security and Medicare tax rate on incomes above $400,000 from 3.8% to 5%.
Should Harris be nominated, prediction markets suggest that the vice presidential candidacy could go to several potential candidates, including Pennsylvania Governor Josh Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly.