TAX INCIDENCE ANALYSIS ISN'T EASY.  At the Iowa State Fair, Republican hopeful Mitt Romney encountered an audience skeptical of his assertion that corporations don't pay taxes, people do.  Matt Yglesias, who has more time to search the relevant research than I am willing to allocate, turns up a few sources. "The short answer is that nobody knows and the results seem wildly contingent on modeling assumptions." He concludes with an intriguing observation. "One of the main 'real world' elements of the case for the corporate income tax, as I understand it, is that failure to impose such a tax would simply create an inviting method for evasion of individual income taxes." Is it any more inviting than creating corporations for the purpose of sheltering income by losing money, or by taking capital losses so as to reduce individual liability? Many years ago Milton Friedman observed that economic losses for the purpose of reducing tax liability were still losses, and resources allocated to produce tax losses were resources allocated inefficiently.