[danjayh]

My father, who is quite wise and right about many things, is very fond of stating that corporation's don't pay taxes - they just pass them on to other people. He owned a local redi-mix company until he retired, and they routinely adjusted wages and prices in response to local, state, and federal tax changes. It's a fact of life that the money corporations pay comes from somewhere, whether it's on the 'in' side or the 'out' side of the balance sheet.

[jeremysalwen]

One of those "out" sides of the balance sheet is the owners of the corporation. That's generally who people think of when they think of who "pays" corporate tax. Especially for taxes on profits, which go 100% to the owners.

[rlanday]

I agree that that’s what people seem to think. But if the corporate taxes get too high, wouldn’t you think that at some point, business owners start saying “screw it, I want to be a W-2 worker,” which obviously would put downward pressure on employee wages? Conversely, now that the tax reform bill created all these tax advantages for passthrough income, isn’t it obvious more people are going to be starting businesses and trying to structure their income as business income?

[reverius42]

Why would the business owners wanting to be W-2 workers cause downward pressure on employee wages?

[rlanday]

Because there’d be more competition for W-2 jobs? Any situation where the average business owner can make more money by becoming a W-2 worker at someone else‘s business is not a stable equilibrium.