If the Trump administration’s tariff policy has proved anything, it’s that corporate America can afford to pay higher tax rates without the disruptions that Republican devotees of supply-side economics always say are inevitable.

The duties — paid by importers and either absorbed by them or passed on to customers — brought the US Treasury around $29.5 billion a month in extra revenue over the second half of 2025. Even so, the median estimate of economists surveyed by Bloomberg for 2025 gross domestic product rose, from around 1.35% in the wake of the “Liberation Day” tariff announcement in April to the current 2.2%.

Also note that the 1950s were a great time for equities even with high corporate tax rates, as the S&P 500 surged 193% over the decade. As for GDP, it grew an average of 4.24% each year.

There is not doubt that the government’s need to find ways to boost revenue is becoming more urgent. The US spent $7 trillion in 2025 and collected some $5.2 trillion in revenue. That $1.8 trillion deficit was 5.8% of GDP. In its February update, the Congressional Budget Office forecast the gap will expand to more than $3 trillion over the next 10 years, or 6.7% of GDP. The extra borrowing needed to cover the shortfall will cause federal debt held by the public to rise from 99% of GDP to a record 120%.

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