You described a VAT tax, our tax is to the final buyer the customer. Net profit is taxed as ordinary income or capitol gains.
If I produce a product, I do not charge a sales tax to the buyer (unless they are the end of the line), if they modify it they do not add tax to the buyer of the modified product, it is the final consumer who pays.
(OK, there may be portions of any given item produced that is taxed but it is small. An example in my own case, I was an electronic drafter, I was required to charge a 4% tax on the paper I drew on but nothing else)
A few people get what I’m talking about. I guess not all. I worked in corporations and I know what they do.