[bjustin]

Given that lawmakers are people, we will never have a perfect legislative system. Were we to somehow get a perfect, loophole free tax code, it will suffer death from a thousand papercuts. Lawmakers will get provisions that benefit their states at the expense of the others, and we eventually end up around where we are now. For example, they decide how you should calculate profits from revenue & expenses.

Taxing revenue not only limits methods that businesses can use to reduce their tax burden, but also limits opportunities for corruption or favoritism as compared to taxing profits.