One problem I have with your theory is that an ordinary business cannot pass on 100% of any cost increase. Saying they could raise prices raises the question as to why they didn’t just raise prices before incurring the new cost.
If everyone could simply pass their taxes on to someone else (businesses to customers, employees to employers, etc.), then maybe no one really pays taxes? We know better than that.
In fact, anyone who could actually pass on an additional expense would not object to incurring the additional expense. And, we know better than that.
In my post I did say that some choices may not be feasible ... for the very reason you mention.
Business keep prices low and wages high in order to compete for customers and labor in the open market. Decision are made based on known factors, which include the tax rate, and their required rate of return.
Business generally won’t raise prices on customers unless their competition is doing so also, which normally wouldn’t happen UNLESS there is a substantial economic change, such as raising the corporate income tax.
But again, if raising prices or lowering salaries was not feasible, the business could always shut down. So as I said, you can try to tax “the rich”, but those with the means to make many choices will find a way for the burden to fall on the non-rich.
Regarding your last two points.
I never said “everyone” could pass it on. I said “the rich” could. Not every small business owner is rich. Those who are not may not be able to afford to shut down their business and might have to settle for a lower return on investment as if the tax could not be passed on.
These non-rich owners are also the ones who would complain the most about raising the corporate tax rates. The rich won’t care as much, since they know they can either re-shuffle the deck, or find another game.