Deduct the labor cost of salary and wages only, and the distributions to the owners. Those are someone else's income. If it isn't someone else's income, for them to pay tax on, you pay tax on it. No loopholes or exemptions, period. The only way for a dollar to not be your income is if you gave it to someone else, to be their income.

If you add up all the incomes of all the tax-paying entities, it should equal the money supply multiplied by the velocity, minus the unreported income economy.