Goldman Sachs has indicated that if Kamala Harris becomes the Democratic presidential nominee, her economic policies will closely mirror those of President Biden. This comes in the wake of Biden’s announcement that he is stepping aside from the race, following mounting pressure for him to do so after a less than stellar debate performance against Donald Trump.
In a show of support for Harris, Biden announced his endorsement, which has been echoed by several prominent political figures including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite the shift in leadership, Goldman Sachs analysts believe that significant changes to the Democratic fiscal and trade agenda are unlikely.
Specifically, Goldman reported that the odds of the Democrats securing the presidency would only increase slightly with Harris as the nominee, estimating the chances to be just under 40%. They noted that the key fiscal challenge ahead involves the expiration of personal income tax provisions from the Tax Cuts and Jobs Act in 2025, which will require whoever wins the election to make critical decisions regarding tax extensions and new tax policies.
Goldman Sachs provided crucial insights into potential fiscal policies under a Biden victory, including:
– A proposed tax rate of 39.6% on individuals earning $400,000 or more, up from the current 35-37%.
– Suggesting a corporate tax rate of 28%, higher than the current 21%, though they doubt Congress would approve this and believe a more realistic outcome might be around 25%.
– A proposed increase in the tax rate for Social Security and Medicare on incomes exceeding $400,000 from 3.8% to 5%.
Looking ahead at potential candidates for the vice presidential position should Harris secure the nomination, speculation includes governors Shapiro, Roy Cooper from North Carolina, Andy Beshear of Kentucky, and Arizona Senator Mark Kelly.
The news presents an interesting landscape as the political narrative shifts, highlighting the continuity of economic policies under a Harris-led Democratic ticket. This consistency could reassure voters who are looking for stability in fiscal strategies during uncertain times. Furthermore, the backing of prominent governors may strengthen Harris’s campaign, as she seeks to build a broad coalition of support.
Overall, the transition from Biden to Harris could maintain the Democrats’ trajectory on economic policy while also opening new doors for grassroots mobilization and engagement among their supporters.