Goldman Sachs suggests that if Kamala Harris becomes the Democratic presidential nominee, her economic plans are unlikely to differ significantly from those of President Biden. This follows President Biden’s announcement on Sunday that he is withdrawing from the race amid increasing pressure for him to step down after a less than stellar debate performance against former President Donald Trump.
In the wake of Biden’s statement, he endorsed Vice President Harris, who expressed her commitment to continue her campaign and received support from notable figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts at Goldman Sachs, led by chief economist Jan Hatzius, do not anticipate substantial changes in the Democrats’ fiscal and trade policies if Harris is nominated.
Goldman estimates that the likelihood of the Democrats retaining the White House has increased slightly yet remains just below 40%. The firm has previously noted that taxes will be a major focus next year, especially as provisions from the Tax Cuts and Jobs Act are set to expire at the end of 2025. This places significant power in the hands of the upcoming election winner regarding the future of tax cuts or possible new taxes.
In terms of specific fiscal policies, Goldman highlighted several predictions should Biden be re-elected: a potential tax rate of 39.6% on individuals earning over $400,000, a proposed increase in the corporate tax rate to 28% from the current 21%, and a rise in the Social Security and Medicare tax rate on high-income earners to 5% from 3.8%.
Should Harris be the nominee, odds for the vice presidential candidacy favor governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly.