Vice President Kamala Harris’s economic strategies are not expected to differ significantly if she becomes the Democratic nominee for president, according to a recent report from Goldman Sachs.
With President Joe Biden announcing his withdrawal from the Democratic nomination race following a challenging debate against former President Donald Trump, he endorsed Harris, who has confirmed her intention to pursue the presidency. Harris has already garnered endorsements from notable figures including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, significant shifts in policy are unlikely.
Goldman Sachs analysts, led by Chief Economist Jan Hatzius, noted that the Democrats’ fiscal and trade policy is not expected to change meaningfully with Harris at the helm. They calculated that the probability of Democrats securing the White House has increased slightly, hovering just below 40%.
The firm had previously indicated that tax policy will be a primary focus in the coming year, particularly with the impending expiration of the personal income tax provisions from the Tax Cuts and Jobs Act at the end of 2025. The next president will have the task of determining the future of these tax cuts and whether new taxes will be implemented.
Goldman’s fiscal policy projections under a potential Biden victory include:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rate of 35%/37%.
– A proposed corporate tax rate of 28%, raised from the current 21%. However, Goldman expressed doubt that Congress would agree, suggesting a more plausible outcome would be a 25% rate. In contrast, Trump has proposed lowering the corporate rate to 20%.
– A proposed increase in the Social Security and Medicare tax rate for incomes above $400,000 to 5%, up from the current 3.8%.
If Harris becomes the nominee, potential candidates for the vice presidential position include Pennsylvania Governor Josh Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, and Arizona Senator Mark Kelly.