“U.S. producer prices surge in July as Trump tariffs push cost higher” — Associated Press, Aug. 14

Whoomp! There it is! 

Vindication in the latest Producer Price Index (PPI) report of the Uniparty’s hair-on-fire search for the inflation that will surely result from The Orange Colossus’ tariffs.

And recycling a quote from the wholly unbiased (guffaw) AP’s account, the Democratic National Committee asserts, “Economists predict that it will ‘only be a matter of time’ before Trump’s tariffs drive even higher prices for American consumers.”

Let’s put aside for a moment the fact that this “analysis” is almost certainly wrong, as the PPI hike was primarily attributable to rising prices for services, not tariffed goods.

Because in their omnipresent Orange-Man obsession, the TDS-tinged Democrats – in a talking point echoed by everyone from Cryin’ Chuck Shumer to binder-chucking Amy Klobuchar to Miss Lizzie Warren to Weekend-at-Bernie Sanders – have made an earthshaking, gobsmacking concession to common sense that cries out to be capitalized on.

To wit: tax increases on producers (and the productive class) can be inflationary. With resulting higher prices ultimately passed on to consumers.

Who knew?

This dramatic Democrat declaration should advance us directly to a renewed debate on one of today’s premier examples of stupid government: the corporate income tax.

As your correspondent has astutely noted in this platform’s predecessor publication: the correct amount of corporate taxation should be – wait for it – zero. Zilch. Zip. Nix. Nada.

Why? Because “corporations don’t pay taxes: people do” (or if you prefer, consumers do) … “as the cost of government is passed down (via prices of goods/services) in the least transparent manner possible with huge inefficiencies attached.”

And note one critical element of that characterization: “huge inefficiencies.” Inflation is frequently described as “too many dollars chasing too few goods.” But in reality, it goes back to the most basic law of economics: it’s too much demand chasing too little supply, in this case, production.

If higher inputs and/or inefficiencies, with all else equal, unduly increase costs of production, they reduce supply. And corporate taxation is especially destructive to value creation. As also noted by this wretch in his prior scribblings: corporations “get better returns from investing in armies of lawyers and accountants and unproductive dodges than from investing in job creation and growth” – in particular,  investment in “productivity growth,” as the Wall Street Journal correctly puts it in an otherwise equally strained analysis of the PPI numbers.

Lower productivity, again, means less supply for the same inputs and thereby, higher inflation.

It’s even worse when on the other side, demand is artificially pumped up by not just unproductive, but counterproductive government boondoggling financed by those taxes. (Think paying women heads of households for being single and poor, or subsidizing expensive, unreliable and environmentally destructive “renewables.”)

So what did Sleepy Joe Biden and his autopen-wielding cohort do? They institutionalized inflationary government: corrupt and profligate shoveling of money to crony capitalists plus incentives not to work – funded by stealth hikes in corporate taxes after The Donald had achieved a miraculous reduction in rates. And Krazy Kamala? She wanted to boost Trump’s reduced corporate levy by a third.

So if taxes as a cost of production can be inflationary, why are tariffs a superior solution to paying for the service (sort of) we call government?

First of all, for the main reason Donald Trump loves them: tariffs are primarily a burden on foreign production, which for decades has been deliberately underpriced by, for example, slave labor-employing and trade-barrier constructing competitors such as China and Southeast Asian countries.

Second, tariffs on finished goods in particular appropriately shift taxation to consumption, which dampens undue demand. But more important, that shift creates the possibility of further reducing government’s perpetual and preposterous punishment of productive pursuits, including savings and investment, manufacturing and job creation, and actual work via income, payroll, estate and capital gains taxes – but especially corporate taxes.

The room tariffs create for that virtuous variation in policy has just been underscored by Congressional Budget Office Director Phillip Swagel. CBO projects that Trumpian tariff policy could decrease total deficits by four – count ‘em, four – trillion smackers by 2035. 

And while it’s hard to find updated projections for corporate tax revenues between now and 2035, the CBO before the passage of the One Big Beautiful Bill pegged them at $4.5 trillion. Incentives in the bill certainly knock at least half a trill of that.

See where this commentator is going with this? Treasury Secretary Scott Bessent insists that when the OBBB’s investment-promotion provisions kick in, they alone will rocket growth. But imagine what could happen in terms of non-inflationary expansion – including head-spinningly rapid reshoring of production and jobs – if that cool $4 trillion in tariffs is employed to offset a full repeal of the brain-dead brutalization corporate income taxes inflict on the productive class? 

Now that leading Democrats have flung the door open by openly admitting the inflationary impact on consumers of too-high taxes on producers, surely they would sign up for such a tradeoff. The bill could be called – wait for it – Inflation Reduction Act, Tax Edition (or IRATE, for what it would do to their base).

To paraphrase Rahmbo Emanuel: never let an unthinking concession go to waste.

Bob Maistros, a regular contributor to Issues & Insights, is a messaging and communications strategist, crisis specialist, and former political speechwriter. He can be reached at bob@rpmexecutive.com.

Views expressed by guest contributors to Issues & Insights are their own and don’t necessarily reflect the views of the I&I Editorial Board.