Here's just one reason why income taxation is evil. Instead of having people like Joel Spolsky do what they do best - run a software company - it forces them to spend their time figuring out complex workarounds on how to construct office walls so as not to attract a 46% income tax on money they don't have.

The FairTax book mentions:
Some have estimated that nearly 80 percent of all business decisions at the highest corporate levels are made only after due consideration of the tax consequences involved. This, in and of itself, constitutes a tremendous drag on dynamic business decision making, and thus our economy.

(Chapter 4, Our current tax code: The cost of compliance, page 46)
And also:
For several years, the Tax Foundation has calculated the costs of complying with the increasingly complicated federal tax code. They estimate that in 2002 individuals, businesses, and nonprofits spent 5.8 billion hours complying with the tax code - an effort that cost an estimated $194 billion. [...] The December 2005 report calculates that 6 billion hours and $265 billion were spent to comply with the federal income tax in 2005.

(Page 42)
The FairTax site describes an excellent way to solve this.