Why does the IRS tax at a stated rate which it then allows as a deduction resulting in a different rate?

If I earn 100 dollars taxed at 15% but then deduct that 15% of 100 from my income, then I am really not paying 15% but 85% of 15% or 12.75%. So why doesn't the IRS just tax at a rate of 12.75% in the first place?

Public Comments

1. You don't deduct the 15% from your income, you just pay it.
2. you're totally misunderstanding the concept - you either add or subtract income/deductions - after all adds and subs are done, THEN you arrive at taxable income and you check the tax table ONCE
3. I assume that you are inquiring about self employment tax, even though the numbers aren't quite right. If you're inquiring about something else, a more explicit question would be useful. First, IRS does not tax anything. Congress has imposed an income tax and a self employment tax. Congress allowed a deduction from gross revenue for half the self employment tax paid. That results in the situation you described. Congress seldom, if ever, worries about self referential provisions in the Internal Revenue Code, leaving it up to the IRS to sort out the mess. The IRS's solution is what you encounter on Schedule SE and line 27 of Form 1040. If the forms are followed carefully, you end up paying the 15.3% self employment tax on your self employment income minus half of the self employment tax you are computing. I don't believe an easier, more elegant solution exists.