[freeandfreezing]

It is never as simple as that. Before you can apply any "income" tax you have to determine what the "income" is. That may seem simple if you only have income from a paycheck, but it is way more complicated once you have to determine what the income is from a business or investment.

For example, if a business buys a new lathe in October how much of what they paid for it is an offset against their income for that year? All of what they paid, 1/6th of what they paid, 1/60th of what they paid, or some other number?

If a business spends all of their profits to buy new merchandise do they have any income? If so how is it measured - what the inventory cost or what it is worth at the end of the year?

[BillM]

Follow the link. It is the simplest system you will ever see.