Rap -

You're still thinking in terms of wage earners only.

for tools, if not provided - provided by whom?

I would NOT allow a deduction for deterioration. Machinery, too

So if I have to have a computer to do editing for a customer who's a book publisher, it's machinery and I can't deduct it from what the customer pays me? And what's the difference between depreciation and a flat deduction for materials I have to buy to do the job? Depreciation is exactly the same thing as a flat deduction for a required tool, except that you pay it at the same rate that the tool wears out and loses value.

If I buy land that I'm pretty sure has oil under, it's worth quite a bit more than if it's already had the oil pumped out. The difference is a cost of pumping the oil out. There are good arguments that the "depletion allowance" is at the wrong rate, but it is a legitimate expense and deserves to be an offset on NET/TAXABLE INCOME.

I think you're just trying to put all the small businesses out of business by your thinking that everybody gets paid by the hour and everybody works for an enormous enterprise with a fat-cat CEO.

You're also a bit out of touch it seems, since $10,000 net income per year (less than $5/hour for a full time worker after Social Security and Medicare withholding) is below poverty level in most parts of my country. I know quite a few people who pay out almost that much just for medical coverage for one person (which is optional, of course) plus auto insurance for one car (which is required by law). Of course to have insurance (and a car) one needs to have significantly more than $10K per year in income - but only a little more if you sleep in the car to avoid paying rent.

John