Trump ran on cutting taxes. But once tariffs are counted, his policies are raising taxes and costs this year for every income group except the richest 1%, per a new report from the Institute on Taxation and Economic Policy. The reason: tariffs, which are largely passed on to consumers as higher prices, outweigh the tax cuts for most Americans. Even the right-leaning Tax Foundation calls the tariffs the largest U.S. tax increase as a share of GDP since 1993.

Tariffs added 2.9 percentage points to consumer goods inflation at their February 2026 peak, per New York Fed research. Without them, goods prices would have fallen slightly. Since then, the effect has faded fast, after the Supreme Court struck down Trump’s emergency tariffs. The NY Fed now expects tariffs to actually pull goods inflation below zero into early 2027.