America's Second Gilded Age

Increasing the wealth gap is not good.

May 20, 2025

Late Sunday night, the House of Representatives voted to advance what Republicans are calling their “big beautiful budget bill.” Senator Chris Murphy has described it as “the most massive transfer of wealth from the poor and middle class to the rich in the history of the country.”

While the bill includes a few “populist” provisions—an expanded child tax credit, elimination of taxes on tips and overtime pay, and a new deduction for car loans—it overwhelmingly benefits the wealthiest Americans. When accounting for the bill’s spending cuts, households earning under $55,000 (the bottom 40%) actually come out worse off. Meanwhile, households earning over $631,500 would receive an average tax cut of more than $60,000 per year.

This isn’t just a tax bill. It’s a policy agenda that inflicts real harm on millions of families and narrows the path to financial stability for many more. Cuts to medical research and environmental protection make a mockery of the so-called “Make America Healthy Again” agenda.

I'll explore those specifics in future posts. Today, I want to focus on the bigger picture: the massive transfer of wealth this bill represents—and what history tells us about where this path leads.

A Dangerous Level of Concentration

In the 1970s, the top 1% of U.S. earners took home about 10% of national income. By 2020, that share had doubled to over 20%. Meanwhile, middle- and working-class wages stagnated.

The concentration of wealth is even more extreme:

The top 1% now holds between 33% and 40% of all U.S. wealth.
The bottom 50% holds just 2% to 3%.

This level of inequality hurts everyone.

It weakens consumer spending, slowing economic growth.
It fuels resentment and division.
It leads to worse outcomes for most Americans—shorter life expectancy, lower educational attainment, and declining public health.

But it’s not just an economic issue.
It’s a threat to democracy.

The wealthiest Americans can buy political access, dominate lobbying efforts, and influence media narratives. This distorts democratic representation, resulting in tax, labor, and environmental policies that benefit the rich while ignoring the rest. When people feel the system only serves the elite, they lose faith in government—creating fertile ground for disillusionment, extremism, and authoritarianism.

The Gilded Age Playbook

To understand where we’re headed, look back to the original Gilded Age (1870–1900)—a term coined by Mark Twain to describe a period of rapid industrialization, monopolistic practices, and extreme inequality.

By 1900, the top 1% controlled over 40% of U.S. wealth.
Figures like Rockefeller, Carnegie, and Vanderbilt became symbols of untouchable power.

Today’s 1% holds a similar share—between 33% and 44%. Some economists predict that, if the current budget passes, we’ll soon return to the same level of wealth concentration seen in 1900.

The parallels are striking:

Both eras saw massive wealth accumulation amid political and economic inequality.
Both featured technological revolutions—railroads then, AI and digital platforms now.
Both exposed a deep disconnect between public policy and the public good.
Both showed how politics can be captured by ultra-wealthy donors and corporate interests.

But history also reminds us: this level of inequality can trigger reform.

What Comes Next?

The backlash to the original Gilded Age gave us the Progressive Era—a wave of reforms aimed at curbing concentrated power. These included:

Antitrust laws to break up monopolies
A progressive income tax
Direct election of Senators
Women’s suffrage
Labor protections
Public education expansion
Broader social reforms

Today, we face another inflection point. We are living through a second Gilded Age—an era defined by extreme inequality and democratic erosion. The question is: Will we respond as we did before, with reforms that rebalance power? Or will we allow inequality to calcify into a permanent class divide?

One Last Note on Process

This bill isn’t law yet. Internal GOP divisions remain:

Hardliners want deeper and faster cuts.
Moderates are wary of gutting social programs.

Republicans still hope to hold a floor vote this week. After that, the bill heads to the Senate, where Republican senators have signaled they’ll demand changes. Only once those differences are resolved can the bill go to Trump for signing.

Stay tuned for further updates and analysis.