[yebyen]

That's very short-sighted. If you are incorporated for yourself then:

> each dollar of taxes paid (by either entity) is coming out of your own pocket

You can keep it in pocket A, the corporation, and pay taxes once (on profits only, I guess), or move it to pocket B and pay taxes a second time also, at a much higher rate (and on overall income, again a larger basis than it would be to count up personal profits.) If you can replace some personal expenses with corporate expenses, end-around pocket B completely, now your business has also made less profit, so pays less corporate tax. I am not a tax accountant (or even remotely skilled in taxes) and this is not tax advice, but it makes pretty good sene to me. Certainly some part less than all of what I suggest would be considered illegal tax dodging or corporate malfeasance.

Sounds like a good incentive for CEOs/majority owners of small businesses to live frugally and to refrain from looting their corporate coffers excessively. Sure, a bird in the hand is worth two in the bush, but it also seems very clear to make the case that two whole birds in the bush are worth more than 0.94 birds in the hand.

You are thinking like an employee.