[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.

[phil_will1]

"Your income from profits is MAXIMIZED by charging the correct price which has NOTHING to do with an income tax."

Incorrect. The optimum price is achieved at the intersection of the supply and demand curves. The supply curve is, in turn, affected by production costs. Income taxes, contrary to your unsupported assertion, are a cost of doing business.

Several other SQLs have argued for years that prices exist in one corner of the economic universe and production costs exist in another and that never the twain shall meet. That belief demonstrates a fundamental lack of understanding of basic economics.