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When it comes down to it, Kamala Harris’ economic plans won’t be too different if she becomes the Democratic presidential nominee — at least that’s how Goldman Sachs sees it.
President Biden announced Sunday that he is taking himself out of the running for the Democratic nomination, as calls for him to step down grew deafeningly loud following his shaky debate performance against Republican candidate and former President Donald Trump.
Shortly after releasing a statement, Biden endorsed Vice President Kamala Harris, who confirmed her desire to move forward with her candidacy, and received several high-profile endorsements, including from California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro and New Jersey Governor Phil Murphy. But the shift won’t be seismic when it comes to policy.
“We would not expect the Democrats’ fiscal and trade policy agenda to shift meaningfully in the event that Harris is the nominee,” Goldman analysts, led by chief economist Jan Hatzius, wrote in a note late Sunday.
The move to replace Biden with Harris raised the odds of Democrats winning the White House by few points but remains slightly less than 40%, according to Goldman.
Goldman researchers had previously written that taxes will become main fiscal focus next year, with the expiration of the personal income tax provisions of the Tax Cut and Jobs Act set expire at the end of 2025. That means whoever wins the election will decide how much of the cut is extended and whether there are new taxes or cuts.
Here were some of the firm’s forecasts for fiscal policy under a Biden victory, by the digits.
39.6%: The tax rate Democrats are weighing levying on people making $400,000 or more, up from 35%/37%.
28%: President Biden’s proposed corporate tax rate, up from 21% currently. Goldman said that they are “skeptical Congress would agree and a 25% rate seems like a more plausible outcome.”(Meanwhile, presumptive Republican nominee Donald Trump has vowed to lower the rate to 20%.)
5%: Biden’s proposed Social Security and Medicare tax rate on incomes greater than $400,000, raised from 3.8%.
If Harris becomes the nominee, prediction markets ascribe the highest odds of the vice presidential spot going to governors Shapiro of Pennsylvania, North Carolina’s Roy Cooper, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly.