Did you mean "progressive"? If there is any serious thought of this I could see thousands of companies being wound up and reverting to sole trader/partnership arrangements.
I reckon you would see an enormous amount of black money commence again as well.
Someone like myself; I run my businesses like large corporations - report on everything, pay myself as a proper employee and so on. I don't hide any cash.
Why? because the better the profit the business shows, the more money I can borrow from Banks using the business's income for serviceability, as well as my own wage. The more transparent my operations are, the easier it is to borrow. It's a longer term attitude for me.
The extra tax paid
now by both me and the company is nominal when compared to what funds can be borrowed for other projects which will make far more money down the track; ie more property or other businesses.
But if the tax rate on profits was to become progressively higher, and looked like becoming an impediment to the nett profit as a whole, then I would have to start considering a bit of undisclosed. And this would be a widespread mentality I reckon.
Just as an aside to all this; all 3 mechanics I employ are always at me to hide cash, don't declare the punctures and so on. They regard this as being clever and ahead of the game (taxman). One is 38 and has never owned a business and doesn't look like wanting to, the other two are 48 and 62 respectively, both rent and have never owned a business. These two are broke, and the other one will work (because he will have to - it won't be a choice) until retirement. They are all following the pattern of other mechanics they have worked with and have been trained by.
A lot of tradies think this way; always wanting to do cash deals and so on. It makes me smile inwardly.
Why? because generally tradies are the same in many cases; think it's a smart ploy to hide all the cash, but are always broke (buy boats and hotted up cars etc with all their earnings), can't get loans of any decent description and never accumulate any assets, have to work in a one-man show until they drop.