[krade]

not only is this completely wrong, but you aren't taxed on assets, and capital has nothing to do with it either.

assuming you meant revenue and income, your example actually perfectly illustrates the problem. Company A has $1MM in revenue, spends $1MM on SE salaries and is taxed on $800k income. Company B has $1MM in revenue, spends $1MM on some AWS db service and has no income to be taxed on.