Goldman Sachs analysts have stated that Vice President Kamala Harris’ economic policies are unlikely to differ significantly from President Biden’s if she becomes the Democratic nominee for president. This insight comes in the wake of Biden announcing on Sunday that he would not seek re-election, following increasing pressure to step aside after a challenging debate against former President Donald Trump.
In his statement, Biden endorsed Harris, who has since expressed her intention to pursue the nomination. She has gained several endorsements from prominent figures, including Governors Gavin Newsom of California and Josh Shapiro of Pennsylvania, as well as New Jersey Governor Phil Murphy. However, Goldman Sachs indicated that this transition is not expected to lead to major changes in the party’s fiscal and trade policy.
According to Goldman, the probability of a Democratic victory in the upcoming election has increased slightly, now estimated at just below 40%. The firm notes that the expiration of certain tax provisions from the Tax Cuts and Jobs Act at the end of 2025 will compel the next administration to determine future tax policies.
Goldman’s economic forecasts include a proposed tax rate of 39.6% for individuals earning over $400,000, an increase from the current rates of 35% or 37%. They also anticipate President Biden’s proposed corporate tax rate may rise to 28%, although they express skepticism about Congress agreeing to this and suggest a more likely outcome of a 25% rate. Additionally, Biden has proposed raising the Social Security and Medicare tax rate on incomes above $400,000 from 3.8% to 5%.
If Harris secures the nomination, speculation about her running mate includes names like Governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Senator Mark Kelly of Arizona.