Money and Taxes

I write this after a sudden brainstorm that occurred to me while i was just sweating out a 102 degree C fever. Maybe it's an outcome of delirium!
why is there a difference between the tax mechanism for an individual employed person and a business entity? At the end of the day are they both not have the same going on concerns.
A business earns its revenues by selling some product/service, to do so it incurs some expenses, these are allowed to be deducted from its revenues to indicate its net income, which is then taxed.

Why not the same with individuals? If i am an employee in a company making say 3 lakhs per year, why is it assumed that this 3 lakhs is my entire income? There are deductions and limits etc, but simple fact, like a business i too am selling myself, my services, my knowledge. To do so comes expenses, food, housing, travelling etc. Why can i not make allowance for these and deduct them from my revenues (yearly payment) to arrive at a income level
Dont give me any deductions, dont give any leeway, simply whatever remains in my bank account is my taxable income. Let me explain this.
The problem of black money (simply unaccounted for cash earnings) arises because people benefit by not declaring some amount of earnings, else they would be taxed. A question to ask is where does most of this black money get utilised. Middle class houses would definately use this for food, children's education, health. Things that are not captured.

Now this black money is a loss for the government. if the government were to allow an individual to file returns just like a business, then the person would have no incentive to take black money. All they would do is take all the money in white and show the expenses for food, living, housing etc. They automatically get deducted from the salary to give a lower income which the person was anyway showing in the first place.
Ultimately there may not be much difference, but it would bring in much more transparency.

For a person earning 3 lakhs and person earning 7 lakhs it is assumed that cost of living is the same. Hence deductions the same. But I differ, the person earning 3 lakhs buys his vegetables from the mandi, the person earning Rs. 7 lakhs buys them from Reliance Fresh. On 3 lakhs you drive a Maruti Alto, on 7 lakhs a Honda City. Basically what I am trying to say is that cost of living also goes up as earnings increase. These should be made allowances for.

Somehow it feels very natural to me to treat both an individual an business as one and the same. Business is just more individuals but the principles are the same.
For me we should tax people's yearly savings not incomes, that will automatically create an incentive to not stock money but circulate it and get the economy rolling.