A certain amount of income is assumed to be dedicated to necessary expenses like food, shelter, and clothing (at least in some states).
But it's not close to what you can deduct as a company, where you can write of just about any item as a cost of doing business. Corporate retreat in Hawaii? Business expense! Private gym and sauna next to the private parking garage for upper management? Business expense!
You can't do the same thing as an individual, writing off your every purchase as your cost of living.
But why should you even tax a business?
My Spidey sense is detecting an ascent into the wingnutosphere....
If you tax the business, the money just comes from the employees (lower wages) and customers (higher prices).
Trite nonsense, if it's a tax on profit. Such a tax could be 95% or .005%, and it would result in neither of the above options. Because prices are always set to maximize profits, and wages are always set to minimize payroll. If companies could jack up prices without losing too many customers, or cut wages without losing too many employees, they would go ahead and do it, not wait for a tax.