There's no rule that says only one person pays income tax. For example: 1) You make $20 from employment, and pay $5 income tax. 2) I sell you a sandwich for $

There's no rule that says only one person pays income tax. For example: 1) You make $20 from employment, and pay $5 income tax. 2) I sell you a sandwich for $15. I still owe income tax for the money I made selling you a sandwich, even though you already paid tax.