The concept of embedded "hidden" taxes is simple and straightforward and I understand it completely. What I'm saying is that ANY time a small business owner faces reduced income because he/she must pay the bill to Uncle Sam, then he/she has been taxed. There is a reason that most companies use a measure called EBITDA "Earnings before interest, taxes, depreciation, and amortization to analyze/predict profitability. Profitability forecasts are estimates (by necessity since not all costs are fixed and you can't predict exact sales) whereas a year end tax bill is a precise amount based on actual year end profitability. When this number is decreased due to taxes, the business owner has been taxed. Businesses cannot accurately predict the financial impact of taxes before the tax bill comes due any more than they can accurately predict precise profitability. By making the argument that businesses don't pay taxes because all cost increases are passed to the consumer, you are ignoring the very concept of variable costs.
If you don't like that logic consider this. U.S. tax law views the LLC and the sole proprietorship as the same entity as the owner(s) and at the end of the year, the government says they've been taxed. Since the government consists of officials elected by the people (the true power holders) and their appointees, the people also say that these owners have been taxed. If the true and rightful power holders (the people) say that they've been taxed, who are we to argue. Sorry....I couldn't pass that up.
There's a reason they didn't set a fixed percentage or dollar amount. They understood that science/technology would develop and that costs of maintaining infrastructure and defense would change. Again, assuming that the government collected 1% of GDP (optimistic estimate since actual income or sales available for taxing is less than GDP since the economy is not 100% efficient), we'd be looking at revenues between $125 billion and $150 billion on the high side. I don't know about you but I like interstates. Over the years, I've also become quite fond of the FAA and the nation's aviation based infrastructure. The states and private industry do not pay for GPS satellites or ground based navigation aids that enable extensive efficient air travel nor should they. I believe that our nation needs a robust defense that is capable of taking the fight to the enemy when needed and when it is right to do so. Science and technology have rendered the concept of a "stay at home" military obsolete. These things are all constitutional expenses and $150 billion won't scratch the surface. 10% would be realistic as it would yield $1.5 trillion (on the high side...probably closer to 1.2-1.3 trillion). To put this in perspective, the United States takes in $2.1 trillion right now but SPENDS about $2.5-2.6 trillion. This tax rate with a balanced budget amendment (to include paying more than just interest on federal debt every year) would result in government expenditures will ensure that the government is effectively reduced to less than half its present size.
How is a percentage of a number variable? Because it is a 'progressive' (their word used in Newspeak context) tax and the business gross is variable? Again, this system penalizes productivity. While the costs may not be passed on in the current tax period, they would be in the next period projection, and will take increasingly longer to recover because of the 'progressiveness' of the taxes, adding more recovery costs, and so on.
The "People" are no longer the master.
The DoD does not need overly complex, expensive, and unreliable systems to defeat an enemy only a few generations from being archers and lancers. That was the argument during the Cold War that Ike warned us about. I deal with the FAA daily, and it is not what you may think it is. GPS was funded by DoD and had nothing to do with the FAA until recent development of WAAS, DGPS, and GPS-enabled precision approaches. Ground based NAVAIDs, as they currently exist, are going away due to the cost of replacing vacuum tube systems and maintenance. The Military-Industrial complex (Science and Technology) pushed the complexity of war fighting systems, but now, in great measure, Off-the-shelf systems are often more than competitive with the DoD procurement process at substantially lower costs, including adaptation. For reference see the COTS programs and the the newest COIN aircraft program. Compare the unit cost of each COIN platform to an F-22A or F-35 acquisition.
Providing war fighters with mission needs instead of supporting 'toys', ridding payment of 'entitlements' for votes, and stopping support of spurious third, second, and first-world governments, the UN, and NGOs would likely get us below 10%.