Goldman Sachs has indicated that Kamala Harris’ economic plans would not significantly differ from President Biden’s if she becomes the Democratic presidential nominee. Following Biden’s announcement that he is withdrawing from the race amid increasing calls for him to step aside after a challenging debate against former President Donald Trump, he endorsed Harris, who is eager to continue her candidacy. Harris received endorsements from prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, the policy shift is expected to be minimal.
Goldman analysts, led by chief economist Jan Hatzius, noted in a statement that they do not anticipate a meaningful change in the Democrats’ fiscal and trade policy agenda should Harris be nominated. The firm has slightly increased the likelihood of a Democratic victory in the presidential election, estimating it to be just below 40%.
Additionally, Goldman previously pointed out that tax policy will likely become a primary focus next year, particularly as the personal income tax provisions from the Tax Cuts and Jobs Act are set to expire at the end of 2025. The outcome of the election will determine whether these cuts are extended or new taxes are introduced.
Ford’s forecasts related to Biden’s fiscal policy include a proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the existing 35%/37%. They project a proposed corporate tax rate of 28%, up from the current 21%, although they express skepticism that Congress would agree to that figure, suggesting a more likely rate of 25%. Furthermore, Biden has proposed increasing the Social Security and Medicare tax rate on incomes over $400,000 from 3.8% to 5%.
In the event Harris secures the nomination, prediction markets indicate that potential candidates for the vice presidential spot could include Governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly of Arizona.