Does paying down debt in an S Corp decrease profitability?

Someone else pointed out that this isn't how it works - paying down debt won't decrease profitability for tax purposes.

"Someone else" is correct. Principal payments on debt are not tax deductible; only the interest on debt is a tax deductible expense. From an accounting standpoint this intuitively makes sense: when you take out a loan, the business bank account is credited, and the new loan account is debited. That money is not considered income and is not taxable. Similarly, when you move money back from the bank account into the loan account (paying off principal), the reverse is true, and the payment is not an expense.

A good example of this is when the loan is a line of credit. It's common to move money out of the LOC into the bank account to cover payroll for a few days, and then move it back after a customer check clears. This way only a few days of interest is paid (which is deductible), but of course the full amount of money moved is not.