You seem to prove my point.
"So tell me, which number is better, $45,000 or $36,000."
You should have said....
"So tell me, which number is better, $45,000 or $36,000 + $10,000 in assets". This assumes you were smart enough to invest in areas that added value to your company. Most small businesses would anyway.
Even at the paltry 10% tax rate, the watering system is looking pretty good......then consider the benefit to the watering-system company, and all of the related industries. Without that encouragement, the owner sits on the cash and tries to pocket as much as he can. This sure seems to be happening as the tax rates on the wealthy have dropped since the 70s. What else is causing the growing gap between the classes?
How about we set the tax rate at 50%. You sold $100k, expenses were $50k, profits are $50k. Then your profits are $25,000 after taxes. OR, you could invest that $50k in another employee, and some equipment. You pay no taxes now, and you own a business with a value which has increased by more than $50k (assuming you spent money on company growth/talent/assets), and you are only out $25k.
So tell me, which number is better, $25,000 or $0+$50k in growth. Which one breeds a growing business, and which one breeds a climate of trying to milk your company for all it is worth so you can buy a small island?
I am not an economist; just a voter trying to understand. The republican soapbox lecture on economics seems completely backwards to me.