Goldman Sachs has indicated that Kamala Harris’ economic policies are unlikely to differ significantly if she becomes the Democratic presidential nominee. This conclusion comes in the wake of President Biden announcing that he would not seek re-election, following criticism of his debate performance against Donald Trump.
After Biden’s announcement, he threw his support behind Vice President Harris, who expressed her commitment to run for the presidency and has already secured endorsements from several prominent politicians, including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro. Despite this shift, analysts predict little change in fiscal policy.
Goldman Sachs analysts, led by chief economist Jan Hatzius, noted that they do not anticipate any substantial shift in the Democrats’ fiscal and trade policy agenda should Harris become the nominee. Current predictions suggest that the likelihood of a Democratic victory in the White House has increased slightly but remains under 40%.
The report highlighted that a focus on taxation is imminent, particularly with the expiration of certain tax provisions from the Tax Cut and Jobs Act at the end of 2025. This situation will put future tax measures at the forefront for whoever wins the upcoming election.
Goldman Sachs provided some specific projections regarding potential fiscal policies under a Biden or Harris administration:
– A proposed tax rate of 39.6% on individuals earning $400,000 or more, a rise from the current 35%/37%.
– A potential increase in the corporate tax rate to 28%, up from 21%, although the firm remains doubtful that Congress would agree to this, suggesting a more likely outcome of around 25%. In contrast, Donald Trump has pledged to reduce this rate to 20%.
– An increase in the Social Security and Medicare tax rate to 5% on incomes above $400,000, up from the current 3.8%.
Looking ahead, if Harris secures the nomination, prediction markets suggest that potential candidates for the vice presidential slot could include Pennsylvania’s Governor Shapiro, North Carolina’s Governor Roy Cooper, Kentucky’s Governor Andy Beshear, or Arizona Senator Mark Kelly.