UPDATED 2:50 PM PT – Wednesday, January 13, 2021
Higher taxes, fewer jobs and slower economic growth — those are just a few things on Joe Biden’s to-do list.
This week, investment bank Goldman Sachs released a forecast of what life could be like under a potential Biden administration. In a recent note to clients, Goldman said Democrats would have control over both chambers of Congress and the White House, which would allow them to impose their agenda mostly unopposed.
Experts expect individual income tax to go up, while business taxes could increase to between 25 and 28 percent. If business taxes go up, it could impact job numbers as small businesses may be forced to lay off some employees. As a result, Goldman expects a slower GDP growth.
According to experts, a fragile U.S. economy would require a broader fiscal stimulus, which will lead to further expansion of U.S. national debt.
“Some of these things are more ideologically controversial and so we do think something will be passed,” Goldman Sachs Chief Economist Jan Hatzius stated. “The number one item on our list on the tax side is probably an increase in the corporate tax rate.”
Goldman also expects an expansion of free healthcare and education — all paid for by money-printing, which will lead to an increase in the U.S. inflation rate.
As a result, the U.S. will face a worse business climate and broader poverty. This would call for even more government interventions in the economy.