After the inauguration, Donald Trump said we would be entering a new golden age. He didn’t explain why he thought that. So it left us to wonder what would cause it to be a golden age.
My mind immediately went to the Gilded Age, a time in American history when fortunes were made and conspicuous wealth was often celebrated. It was the period from the early 1870s through the early 1890s when Andrew Carnegie, Cornelius Vanderbilt, John Jacob Astor, and others rose to prominence.
Since Trump’s favorite president is William McKinley, it seems very likely that the golden age he envisions is the Gilded Age of the late 1800s.
McKinley was elected to Congress in 1876 and became president in 1897. But before he became president, he was overwhelmingly defeated in his bid for reelection to Congress in 1891 because of the tariff bill he sponsored in 1890, the McKinley Tariff Act. That act is credited for Republicans losing 70 seats in the house! And when the U.S. entered a depression in 1893, it was known as the McKinley Depression.
Despite the extreme unpopularity of his tariff policies, Taft was elected president in 1896 and, consistent with his past, introduced high tariffs. It’s worth noting that in 1901, shortly after winning reelection, McKinley was assassinated by a man who said McKinley didn’t care about the common man.
And that’s probably true. The McKinley Tariff Act conspicuously exempted luxury goods. After they were enacted, the tariffs were credited with increasing the basic cost of living by 25 percent.
So why would Donald Trump find McKinley and his unpopular tariffs so appealing?
It might have to do with the kind of tax that import tariffs are. They’re known as a regressive tax, one that taxes lower- and middle-income earners at a higher percentage than higher-income earners.
So if everyone pays the same tax on say, avocados, how could that be called regressive? Because if you’re just making ends meet, then a higher percentage of your income—in many cases 100 percent—is spent on essentials. But if you have excess income, then less of your income is being spent on essentials. So any taxes levied on goods, from food to automobiles, falls more heavily on low- to middle-income households. This is true of sales tax and it’s true of tariffs.
Tariffs shift the burden of funding the government down the income ladder. And that’s the opposite of income tax, which is a progressive tax—meaning the more money you make, the higher the percentage of tax you pay.
The stated goal of the Trump tariffs is the elimination of the income tax. While that seems extremely unlikely, any progress in that direction will benefit high-income earners at the expense of low-income earners.
In the 1890s, the McKinley Tariffs, which exempted luxury goods, were responsible for the federal government running a surplus. There are some estimates that today’s tariffs will generate as much as $680 billion in tariffs over the next 10 years.
So after implementing these taxes, the administration has introduced a bill designed to lower taxes, especially on high-income earners. These two things are directly connected.
And just in case you missed it, the negotiated tariff deal with the UK specifically exempts Rolls Royce from tariffs. So, yeah, you and I will have to pay higher prices for Toyotas and Volkswagens, but Trump and the 13 other billionaires in his administration won’t have to pay a higher price on a Rolls. Put another way, if you buy a Toyota, it helps fund the government, but if Howard Lutnick, the Secretary of Commerce and a billionaire, buys a Rolls, he doesn’t help fund the government. It’s exactly like the McKinley Tariff Act exempting luxury goods.
From 1965 to 2024, tax rates fell by 47 percent for the highest earners, and by 36 percent for the typical middle-class earner.
For 60 years, there has been a downward shift in the burden of funding the government. And since the size of government has grown in every administration, it’s no surprise that, when combined with lower tax rates, we have a mind-boggling pile of debt.
In 2018, the wealthiest 500 Americans were worth a combined $3.1 trillion. In 2024, they’re worth a combined $5.6 trillion—an 80 percent increase. The 2017 Trump tax cuts have been extremely kind to those at the top.
So how do tariffs and Trump’s golden age fit together? By downward shifting the burden of funding the government, we help continue today’s gilded age. Mega fortunes are better able to compound their growth with less taxation. Musk, Bezos, and Zuckerberg are today’s Carnegie, Vanderbilt, and Astor.
The rich have been getting richer. Tariffs are a tool to help that continue. The