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In Ohio and perhaps a few other States, yes. Most States however do not compute your taxes in this manner. Several have zero State income tax. My State has a 6.5% cap for the highest rate but it is computed on my 1040 amount after my itemized deductions so this method has no additional adverse effect on me.

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So I guess there are some states where you can not net enough profits to pay for the taxes on on your gross?!? How horrible! Does anyone know if Illinois is one of those states?