A principled tax reform allows expensing of all business costs

Classic tax reform involves reducing rates in return for closing loopholes. But what is a loophole? Is any deduction a loophole?

The U.S. income tax is supposed to be a net income tax, not a gross income tax. A net income tax includes deductions for the costs of producing income, such as wages, raw material inputs, tools and equipment, transportation both for raw materials and finished goods, signs, advertising, etc.

Classic tax reform involves reducing rates in return for closing loopholes. But what is a loophole? Is any deduction a loophole?

The U.S. income tax is supposed to be a net income tax, not a gross income tax. A net income tax includes deductions for the costs of producing income, such as wages, raw material inputs, tools and equipment, transportation both for raw materials and finished goods, signs, advertising, etc.