Goldman Sachs has analyzed the potential economic policies of Vice President Kamala Harris should she become the Democratic presidential nominee, suggesting that her plans may not significantly differ from those of President Biden. This assessment follows Biden’s announcement that he is exiting the race for the Democratic nomination, largely prompted by criticism of his recent debate performance against former President Donald Trump.
Shortly after his statement, Biden endorsed Harris, who expressed her intention to continue her candidacy and received support from notable figures, including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro. However, according to Goldman Sachs analysts led by chief economist Jan Hatzius, there is expected to be minimal change in the Democratic fiscal and trade policy agenda if Harris becomes the nominee.
Goldman’s analysis indicated that the likelihood of a Democratic victory in the presidential race has increased slightly but remains around 40%. The firm noted that taxes will become a central issue in the coming year, particularly with the expiration of personal income tax provisions from the Tax Cut and Jobs Act set for the end of 2025. The next president will have the authority to decide on extending these cuts or implementing new taxes.
Goldman Sachs provided specific forecasts for expected fiscal policies under a Biden administration:
– A proposed tax rate of 39.6% on individuals earning $400,000 or more, an increase from the current rates of 35% and 37%.
– A suggested corporate tax rate of 28%, an increase from the existing 21%. Goldman expressed doubt that Congress would agree to this rate, indicating that a 25% rate is a more feasible possibility. In contrast, Donald Trump, the presumptive Republican nominee, has proposed lowering the corporate tax rate to 20%.
– A proposed tax rate of 5% for Social Security and Medicare on incomes exceeding $400,000, an increase from the current 3.8%.
Should Harris secure the nomination, predictions suggest that the vice presidential pick may lean towards governors such as Shapiro from Pennsylvania, Roy Cooper from North Carolina, Andy Beshear from Kentucky, or Senator Mark Kelly from Arizona.