Income tax

Is the income tax on the I/S only on operating or non operating income as well?

Reason I am asking is because, if we remove investment from subsidary that was consolidated using equity method, this would increase the tax burden by ONLY reducing net income instead of earnings before tax, which would imply that income from investments under the equity method is already reported net of tax?

You think IRS will allow to go tax free by changing operating income to non-operating income?