re: CBO: Trump’s Tariffs Could Slash Deficit by $4 Trillion

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It is strange, but if Trump were to reverse course on tariffs, and raise corporate income taxes to generate the same amount of revenue, the left's concerns about the inflationary impact of taxes would vanish.

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They'd find something to demonize, even if it wasn't inflation.

I will say, though, that a raise in direct corporate taxes is less guaranteed to cause a reaction from companies than tariffs. Here's why:

1. A smart accountant can strategically avoid direct corporate taxes

2. Taxes are only levied once profits have been made. Taxes on profits aren't operational costs...tariffs are. A tariff can put you out of business by literally making it too expensive to operate. A corporate tax can't do that.

3. Operational costs are tax deductible. So raising the corporate tax isn't anywhere near as likely to cause a company to forgo expansions, promotions, raises, hiring, acquiring assets, etc. because those things are all tax deductible. In fact, in most cases it encourages those things. If a company expands operations and the expansion funds the acquisition of more machinery, real estate, etc., those are assets that increase the company's value, but they got to deduct all of those expenses from their tax bill. Much better to pay for expanded operations to acquire more assets than just pay a bigger tax bill. Direct corporate taxes gives the company that choice. Tariffs don't.