Goldman Sachs has assessed that Vice President Kamala Harris’ economic plans will not significantly differ if she becomes the Democratic presidential nominee. This comes in light of President Biden’s recent decision to withdraw from the race, following criticism of his performance in a debate against former President Donald Trump.
Shortly after Biden announced his endorsement of Harris for the nomination, she expressed her intention to continue her campaign and received endorsements from notable figures including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite this shift, Goldman Sachs does not anticipate a major change in policy direction.
According to Goldman analysts, led by chief economist Jan Hatzius, the fiscal and trade policy agendas of the Democratic Party are expected to remain relatively stable with Harris as the candidate. The analysts noted that while the odds of a Democratic victory in the upcoming election have slightly increased, they remain under 40%.
With the expiration of key personal income tax provisions of the Tax Cuts and Jobs Act approaching in 2025, tax policy is expected to be a central issue in the next election. The new president will have to make decisions regarding the extension of existing cuts and the implementation of new taxes.
Goldman’s forecasts for potential fiscal policies include a proposed tax rate of 39.6% on individuals earning $400,000 or more, an increase in the corporate tax rate to 28%, and a rise in the Social Security and Medicare tax rate on high earners to 5%.
If Harris secures the nomination, speculation regarding her running mate includes governors Shapiro, Roy Cooper from North Carolina, Andy Beshear from Kentucky, and Arizona Senator Mark Kelly.