Goldman Sachs suggests that Kamala Harris’ economic plans will not significantly differ from those of President Biden if she secures the Democratic presidential nomination. This perspective follows Biden’s announcement that he is withdrawing from the race, a decision that comes after increasing calls for him to step aside following a challenging debate against former President Donald Trump.
Biden expressed his support for Vice President Harris, who has confirmed her intent to continue her campaign. She has also garnered several endorsements from prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts at Goldman believe that there will be little change in the Democratic fiscal and trade policy agenda if Harris becomes the nominee.
Goldman Sachs noted that while the shift to Harris slightly increases the probability of a Democratic victory in the presidential race to just below 40%, it still reflects a marginal change. The analysts pointed out the focus on tax policies, especially as the provisions from the Tax Cuts and Jobs Act are set to expire by the end of 2025. The outcome of the upcoming election will be crucial in determining whether these tax cuts are maintained or if new taxes are introduced.
According to Goldman’s forecasts regarding fiscal policy under a potential Biden victory, the following figures were highlighted:
– 39.6%: The proposed tax rate on individuals earning $400,000 or more, up from the current 35%/37%.
– 28%: The suggested corporate tax rate by Biden, an increase from the current 21%. It is noted that Congress may lean towards a more conservative estimate, likely around 25%.
– 5%: The proposed increase in the Social Security and Medicare tax rate on incomes exceeding $400,000, up from the current 3.8%.
If Harris secures the nomination, speculation about the vice presidential candidate suggests potential picks such as Governors Shapiro, Roy Cooper from North Carolina, Andy Beshear from Kentucky, or Senator Mark Kelly from Arizona.