Vice President Kamala Harris is likely to maintain similar economic policies if she becomes the Democratic presidential nominee, according to Goldman Sachs analysts. Following President Biden’s announcement that he will not run for re-election amidst criticism over his debate performance against former President Donald Trump, Harris confirmed her candidacy and received significant endorsements from notable figures, including California Governor Gavin Newsom and New Jersey Governor Phil Murphy.
Despite the leadership change, Goldman Sachs does not anticipate a meaningful shift in the Democrats’ fiscal and trade policy agenda with Harris in charge. Their analysts noted that the odds of a Democratic victory have increased slightly, yet remain below 40%.
As the expiration of personal income tax provisions from the Tax Cuts and Jobs Act approaches at the end of 2025, key fiscal issues are expected to dominate the agenda. Among the potential tax changes, Goldman Sachs forecasts a tax rate of 39.6% for individuals earning over $400,000, an increase from the current rates of 35%/37%. Additionally, Biden’s proposed corporate tax rate could rise to 28%, though analysts are skeptical about Congress’s ability to agree on this figure, suggesting that a more likely outcome might be a rate of 25%. Biden has also proposed raising the Social Security and Medicare tax rate on incomes exceeding $400,000 from 3.8% to 5%.
In the event of Harris securing the nomination, speculation around her choice for vice president includes current governors and senators, with names like Pennsylvania Governor Josh Shapiro and North Carolina Governor Roy Cooper emerging as potential candidates.