[Principled]

You keep confusing independent variables and dependent variables in the Tax equation.

Put your texbook away for a moment.I'm in the real world - why don't you join us? I'm not confusing any variables.

I'm telling you that I would charge less if I didn't have to pay income related taxes and costs. You haven't argued with that yet.....

[justshutupandtakeit]

You SHOULD be charging the market clearing price. Most small businessmen probably do not do that. My father didn't. Thus, if you CAN charge a higher price then you SHOULD under the principle of Perfect Competition. This remains true NO MATTER if there is an income tax or NOT.

Your income from profits is MAXIMIZED by charging the correct price which has NOTHING to do with an income tax. The price which clears the market and maximizes profits is irrelevant to the income. Equilibrating Prices are the product of Market clearing Supply and Demand curves without regard for income taxes.