As the stock market is often influenced by the U.S. economy, it’s no surprise that investors are keen to understand how the economic policies of presidential candidates Kamala Harris and Donald Trump could impact the economy. According to Goldman Sachs, Harris emerges as the clear winner in terms of her potential economic impact.
Goldman Sachs conducted a thorough evaluation of both candidates’ proposed economic policies and concluded that under a Harris administration with Democratic control of Congress, job growth would outpace that under a Trump presidency with divided Congress. Additionally, they projected that Trump’s economic plans would lead to a reduction in GDP by 0.5% in the second half of 2025.
Harris’ proposed policies include expanded child tax credits, bans on price gouging, tax incentives for first-time homebuyers, an increase in corporate tax rates from 21% to 28%, and raising long-term capital gains tax rates for high earners. On the other hand, Trump aims to reduce corporate tax rates to 15%, impose tariffs on imports (especially from China), reduce government regulations on businesses, and pursue mass deportation of illegal immigrants.
Goldman Sachs favors Harris’ spending initiatives and tax credits for the middle class over Trump’s proposals. They believe these plans would outweigh higher corporate taxes and boost GDP growth slightly in 2025-2026 under a Democratic administration.
Despite this analysis from Goldman Sachs, not everyone agrees with their outlook. Both campaigns have publicly responded to these findings based on their respective standpoints.
In terms of its potential impact on investors, it’s important to note that historical stock market performance has not been significantly tied to specific political administrations but rather influenced by other factors such as individual stock quality and length of ownership.
In conclusion:
There are conflicting opinions regarding which candidate’s economic policies may be more beneficial.
Historical stock market performance has shown resilience across different political administrations.
Investors should focus more on selecting quality stocks rather than relying solely on presidential outcomes when making investment decisions.
