Goldman Sachs analysts believe that Kamala Harris’ economic policies will largely align with those of President Biden, should she become the Democratic presidential nominee. Following Biden’s announcement that he would withdraw from the race amid increasing pressure to step down after a challenging debate against Donald Trump, he endorsed Harris, who has expressed her intention to run.
Harris has already garnered significant support from figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts from Goldman Sachs indicate that there will not be substantial changes in the Democrats’ fiscal and trade policies with Harris at the helm.
Goldman’s note, authored by chief economist Jan Hatzius, stated that the likelihood of Democrats securing the White House has increased slightly but remains below 40%. The financial firm previously highlighted that taxes are expected to remain a key focus in the upcoming year, particularly with the expiration of personal income tax provisions of the Tax Cut and Jobs Act at the end of 2025. The next president will play a crucial role in determining the future of these tax cuts and the implementation of new taxes.
Some of Goldman’s key predictions for fiscal policy, should Biden win, include:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% and 37%.
– An increase in the corporate tax rate to 28%, up from 21%, although Goldman doubts Congress will agree to this, suggesting a more feasible rate of 25%. In contrast, Trump aims to lower the corporate rate to 20%.
– A proposed increase in the Social Security and Medicare tax rate for incomes above $400,000 to 5%, up from 3.8%.
In the event of a Harris nomination, predictions indicate that potential candidates for the vice presidential spot include Governors Shapiro, Roy Cooper from North Carolina, Andy Beshear from Kentucky, and Arizona Senator Mark Kelly.