Here is part of an ongoing email conversation I am having with a friend:
But lets take a look at this scenario: Lets say a small family company earns 100,000, at 9% pays 9000.00. The company actually has cost of goods expenses of 50000 (this does not include fringe benefits) so the real tax is 18% on the net income. But what about improvements? If they have a cost of improvement at 25000 then cost of goods 50000 the tax would equals 36% on the 25000 net income. And then the owner has take home income of 25000 which is taxed 9%= 2250 so now we are at 45%. Then this small family spends the 25000 @ 9%=2250. So now the the tax is 54%
I understand also that he wants to do away with the property tax exemption for churches and charities.