Suppose someone proposed a special tax on businesses that make their ownership shares publicly available in affordable, easy-to-sell units. Such an idea would probably generate a lot of push-back. Efficiency advocates might complain that it taxed the very attributes that make equity markets efficient. Progressivity advocates might object on the grounds that it taxed those who have no alternative to publicly available investment opportunities. In fact we already have such a tax. We call it the corporate income tax. In what sense is the corporate tax a special levy on being publicly traded? And what do we know about the policy implications of such a charge? Corporate earnings are taxed twice: First at the corporate level, then again as dividends when they are distributed to shareholders or as capital gains when those investors sell their shares. But not all businesses are double taxed in this manner. The earnings of certain businesses—commonly referred to as “pass-through entities”—are taxed only once, at the individual level. At one time, businesses that wished to be taxed as pass-throughs had to give up certain legal benefits of the corporate form, including the concept of “limited liability” that bars creditors from going after the owner’s personal assets. Alternatively, they had to qualify as special “Subchapter S corporations,” which strictly limited their ownership structure. Now, businesses have available to them alternative forms that replicate many of the legal benefits of the corporation, impose none of the requirements of Subchapter S, and yet avoid corporate tax. Limited liability companies and limited liability partnerships are two prominent examples. According to the Congressional Budget Office, the share of business receipts generated by these pass-through entities has more than doubled since 1980. But there is still one circumstance in which a business cannot avoid the double tax. No matter its legal form, a firm is taxed as if it is a corporation if its ownership interests are publicly traded. (Entities whose earnings consist almost entirely of “passive type income” are exempt from this rule.) A firm meets Treasury’s definition of “publicly traded” if it is listed on an established exchange or otherwise makes its ownership rights publicly available in affordably small, readily salable units. CBO reports that more than three-fifths of all business receipts are still earned by corporations. It is likely that many have not converted to pass-throughs because, wishing to remain publicly traded, there is no benefit to doing so. Thus, the corporate tax is a tax on being publicly traded in the following sense: there is no real reason for a business to pay it unless that business is publicly traded. Understood in this way, the corporate income tax would appear to have important implications for the progressivity and efficiency of the tax code. But those consequences are largely unstudied. Consider, for instance, progressivity. One hypothesis worth considering is that the existing corporate tax is more regressive than a general tax on business investment because the corporate tax is borne more heavily by those who have no alternative to publicly available investment opportunities. Unfortunately, existing research on who pays the corporate tax has little to say about hypotheses of this kind. That literature, which has been nicely summarized by my Tax Policy Center colleague Jim Nunns, has been primarily concerned with how the market shifts the corporate tax burden away from its original legal placement—for example, onto workers as lower wages. But the literature makes counterfactual assumptions regarding the place from which the burden is shifted. The central economic model assumes that certain goods must be produced in corporate form, and that—for at least some consumers—such corporate-specific goods have no close substitutes. This is what gives the corporate tax its bite in the model. But what really gives the corporate tax its bite is that it is effectively a fee on being publicly traded, and that—for at least some businesses and investors—publicly traded ownership has no close substitute. While the original legal placement of a tax burden is not the whole story, it is part of what determines who bears the ultimate economic burden. In recent years, we have learned a great deal about how statutory burdens translate into economic burdens. The next big challenge for students of corporate tax incidence will be to apply those lessons to the actual statutory burden that is the modern corporate income tax.