and deduction of normal business expenses into the "loophole" category. While the former creates timing differences and can lead to lower taxes relative to book net income in a particular period (offset by higher taxes relative to book net income in subsequent periods), but ultimately we tax businesses on net pretax income AFTER expenses (including depreciation). I've seen analysis that uses EBITDA as the numerator to calculate an effective tax rate which artificially (and incorrectly) understates tax rates because we don't tax on EBITDA (interest and depreciation are deductible for tax purposes). I ask because I'm genuinely curious. I'm aware of investment and R&D tax credits that reduce effective rates, but I'm not aware of what all these loopholes are that people like to refer to. I was hoping you could explain them to me.