Goldman Sachs believes that if Kamala Harris becomes the Democratic presidential nominee, her economic plans will closely resemble those of President Biden. This assessment comes after Biden announced he would not seek re-election amid growing pressure to step down following a poor debate performance against former President Donald Trump.
Biden has since endorsed Harris, who confirmed her campaign intentions and secured endorsements from notable figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts at Goldman Sachs do not anticipate any significant changes in policy direction should Harris take the lead.
Goldman projected that while the shift from Biden to Harris would slightly improve the Democrats’ chances of winning the White House, those odds would remain just under 40 percent. The firm reiterated that upcoming fiscal and trade policies will largely remain consistent.
The analysis indicated that taxes will be a key focus for the next election cycle, particularly as reductions from the Tax Cuts and Jobs Act are set to expire at the end of 2025. The outcome of the election will dictate potential extensions of these cuts as well as any new tax proposals.
Goldman’s forecasts for fiscal policy under a potential Biden win include a proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% and 37%. They also estimated a corporate tax rate increase to 28%, although skepticism remains regarding Congressional approval; a more likely outcome could be a rate of 25%. Additionally, Biden’s proposal includes raising the tax rate on Social Security and Medicare for high earners to 5%, up from 3.8%.
If Harris secures the nomination, speculation suggests that potential vice presidential candidates could include governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly.