Reply #30: All depends on how that 4.5% is calculated [View All]

[golfguru]

Is it 4.5% of gross profits or gross sales or net profits.
Net profit has a lot of deductions such as depreciation or allowance
for depletion of oil & gas wells etc.

Other reasons are when outfit A buys another outfit B and if B has loss
carryovers, then outfit A can offset those against its profits and thus
has it's tax reduced.

Which is why the better method is a national sales tax. It is simple, and
straight forward and no loop holes. Eliminate the income tax and replace it
with sales tax. Then even the drug pushers will pay more tax every time they
buy something. Another benefit is that it will reward the efficient outfits and
not play nanny to the inefficient ones.