In addition to which, in the real world, if you tax businesses at every step along the way, that costs just gets passed on to the consumers. In the end, the consumer this way pays less money as a result of tax, even if it appears that they're the only ones getting taxed. (When, in fact, it's just the cost of the finished item getting taxed, not the consumer.) I'm not usually one to promote trickle-down economics, but I think that in this specific case, it's true.