First of all, samadamscw is right about how people find themselves in a tax system in which they don't belong.
However, the tax system is no different than any other system in which there are rules. And I think you have stumbled upon a major point in the issue, but it needs to be thought about in the proper way.
As an employer, you have a painting company that paints fences. You charge $20/hour for the service. You pay your employee $12/hour for his work and you keep $8. So when you file your tax return you don't pay tax on $20. You deduct your cost of preforming that hour of work which is $20 - $12 = $8. Your profit is $8.
Now, you don't employ anyone, but do all the painting yourself. You charge $20/hour. When filing taxes, you get to deduct the cost of doing that business. You have a contract that proves, indisputably, that your time is worth $20/hour. So every $20 you make per hour costs you one hour of your life, which is valued a $20. So now you should be able to deduct $20 as the cost of doing business. You declare $20 - $20 = $0 profit.
I think that they (IRS and GOVT) would have a really bad PR time if they tried to claim that the value of your life was not a valid deduction. I can hear it now over the radio: "man's life worth nothing says the IRS." If that doesn't let people know they're slaves, nothing but prison camp will.
I'm sure that the income tax is a function 14th Amendment citizenship, but I'm not sure, once you're wrapped up in the system, that your life is actually worth nothing. I just don't know of anyone who has tried to account for it before.
Good luck. But before you try this, do some research on cases lost by the IRS. See if there is a court in which a majority of those cases were heard. Try to find or create a jurisdiction in which the IRS has no standing. And if the IRS starts to give you flack have a plan in place to take them to court before they get you stuck in their own kangaroo court. Be a very loud bulldog!
~ Engage in the war of attrition: http://pacalliance.us/redamendment/