Recent analyses suggest that if Kamala Harris becomes the Democratic nominee for president, her economic policies are unlikely to differ significantly from those of President Biden. This perspective comes from Goldman Sachs, which assessed the implications of Biden’s withdrawal from the race following criticism over his debate performance against Donald Trump.
Biden publicly endorsed Harris following his announcement, and she confirmed her intention to run. Notable endorsements for her campaign have also come in from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs analysts, led by chief economist Jan Hatzius, indicated that a change in leadership would not lead to substantial shifts in the Democrats’ fiscal and trade policy agenda.
Despite the transition increasing the chances of a Democratic victory in the presidential election by a few percentage points, Goldman estimates the likelihood remains just under 40%. The firm has highlighted that tax policy will be a critical focus in the upcoming election cycle, especially with the expiration of provisions from the Tax Cuts and Jobs Act set for the end of 2025.
Goldman provided specific forecasts regarding fiscal policy in the event of a Biden victory, which includes:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current 35%/37%.
– A suggested corporate tax rate of 28%, up from 21%; however, the firm noted that a 25% rate might be more feasible given Congressional dynamics.
– A proposed increase in Social Security and Medicare taxes on high earners, raising the rate on incomes exceeding $400,000 from 3.8% to 5%.
Should Harris secure the nomination, speculation suggests that candidates for the vice presidential slot may include Governor Shapiro, North Carolina’s Roy Cooper, Kentucky’s Andy Beshear, or Arizona Senator Mark Kelly.