What sys said is partially right, and partially wrong. It is true that one tax advantage of s-corps is being able to avoid payroll tax on "profit," but the IRS has some rules about how much of your distribution you can classify as profit versus wage. This tax advantage probably isn't as a big a deal as it seems given that payroll tax already caps out at approx. $115k.
The other advantage is no corporate income tax, which actually seems like a bigger advantage.
Many businesses are far too big to be s-corps, but just about any individual could form an s-corp. You'd just have to jump through the hoops of incorporating, pay your annual registration fees, etc.
But if you're thinking anybody can just switch from being a wage-earning employee to an s-corp independent contractor with your employer,
no it doesn't work that way. The IRS anticipated this and has rules against it.
https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employeeMoreover, even if your employer allowed you to do this, let's say you suddenly reclassified have of what used to be your wage as "profit." You really think that would fly with the IRS? You might not get caught, but that doesn't make it legal.
I agree that heaping on additional tax breaks for pass-through entities, especially under the House way of doing it (setting a max rate that would have been lower than the marginal personal income tax rate for high earners), was basically a huge giveaway to wealthy attorneys, doctors, and other typical pass-through recipients. As I said, I'm all for reducing taxes on the wealthy - I just don't see any meaningful reason to reduce one guy's taxes more than another, both making the same money, just because one is an s-corp recipient versus a wage earner.
It the goal is really to help small businesses, the Senate plan (which appears to be what has made it into the compromise bill) is the better way to do it: offering a deduction that makes more of that lower income tax free.