Vice President Kamala Harris’ economic proposals are not expected to differ significantly should she become the Democratic presidential nominee, according to Goldman Sachs.
Following President Biden’s decision to withdraw from the race for the Democratic nomination, which came amid increased pressure after his lackluster debate against former President Donald Trump, he officially endorsed Harris. She has expressed her intention to continue her campaign and has garnered several notable endorsements, including those from California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts from Goldman Sachs believe the policy landscape will remain largely unchanged.
In a report released on Sunday, chief economist Jan Hatzius and other Goldman analysts stated that they do not foresee a substantial change in the Democrats’ fiscal and trade policy agenda if Harris is nominated. They estimated that the chances of the Democrats winning the presidency have slightly increased but still linger below 40%.
Goldman Sachs had previously indicated that the tax landscape will be a major focus in the coming year, particularly with the impending expiration of key provisions in the Tax Cuts and Jobs Act by the end of 2025. The outcome of the upcoming election will determine the future of these tax cuts and the potential introduction of new tax measures.
In their forecasts regarding fiscal policy under a possible Biden administration, Goldman Sachs highlighted some key figures:
– A proposed tax rate of 39.6% on individuals earning $400,000 or more, an increase from the current range of 35%-37%.
– A proposed corporate tax rate of 28%, up from the current 21%. Goldman expressed skepticism about Congress agreeing to this, suggesting a more likely rate of 25%. In contrast, Trump has promised to lower the corporate tax rate to 20%.
– An increase in the tax on income exceeding $400,000 for Social Security and Medicare from 3.8% to 5%.
Should Harris secure the nomination, speculation surrounds potential candidates for the vice-presidential slot, with high odds placed on Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, and Arizona Senator Mark Kelly.