That solution is not simple at all. Let's take the creation and selling of wooden chairs as an example. Let's say chopping down trees costs $100, turning wood

That solution is not simple at all. Let's take the creation and selling of wooden chairs as an example. Let's say chopping down trees costs $100, turning wood into chairs costs $100, and selling chairs also costs $100. Let's assume companies are non-profits (to make things easier). Company A Spends $100 to create a unit of wood. Company B spends $100 for a unit of wood, and spends $100 to make that into a chair, and sells for $200. Company C spends $200 to buy a chair, spends $100 to have a nice shop and friendly sales people, and sells for $300. Now let's add taxes! We'll do 10% to make the numbers easy. Company A pays $10 taxes. Company B pays $20 taxes. Company C pays $30 taxes. Total taxes paid on a chair bought at company C: $60. Now we introduce company D. Company D is large, and can produce its own wood, has its own chair-making factory, and has its own shop. A chair at company D also costs $300. But company D only has to pay $30 in taxes! In the real world, company D will immediately drive companies A, B, and C out of business (or acquire them!) because it can sell its chairs cheaper, because it only had to pay taxes once. The problem with your suggested solution is that companies owning their entire production line get an immediate tax-advantage over smaller companies who do not. If implemented, there would still be legal tax avoidance by simply forming bigger companies.