Goldman Sachs has indicated that Kamala Harris’ economic policies would likely remain consistent if she secures the Democratic presidential nomination.
The developments follow President Biden’s announcement on Sunday that he would no longer seek the Democratic nomination, a decision prompted by increasing calls for him to withdraw after a challenging debate against former President Donald Trump. Subsequently, Biden endorsed Vice President Kamala Harris, who expressed her willingness to proceed with her campaign. She garnered support from prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy.
Despite this leadership change, Goldman analysts, led by chief economist Jan Hatzius, suggested that the Democratic agenda concerning fiscal and trade policy would not see significant changes under Harris’ potential leadership. The analysis projected a minimal increase in the Democrats’ chances of retaining the White House to just below 40%.
Goldman researchers noted that tax matters are expected to dominate the fiscal landscape as the expiration of the personal income tax elements of the Tax Cuts and Jobs Act approaches at the end of 2025. The election’s outcome will be critical in determining the future of these tax cuts and any potential new tax policies.
The firm’s estimates for fiscal policy under a Biden presidency are as follows:
– 39.6%: The proposed tax rate for individuals earning over $400,000, an increase from the current rates of 35% and 37%.
– 28%: A proposed increase in the corporate tax rate from the current 21%, though Goldman expressed skepticism that Congress would agree to this, suggesting a more likely outcome of 25%. In contrast, Trump has proposed reducing the rate to 20%.
– 5%: A proposed increase in the Social Security and Medicare tax rate on incomes over $400,000, up from the current rate of 3.8%.
If Harris secures the nomination, speculation points toward governors such as Josh Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Senator Mark Kelly of Arizona as potential candidates for the vice presidential role.