Here's the IRS's official positions on many tax claims. Like John says, the claim that the sixteenth amendment was not ratified is considered frivolous and in practical terms is indefensible in court.
http://www.irs.gov/newsroom/article/0,,id=120802,00.html
Bud's statement that only the "profit" is supposed to be taxed, but that's not the purpose of an income tax. An income tax taxes... income, naturally.
I expect that Bud got this idea from someone he trusted, who got it from a book or a radio program. And he still believes it, in part because of the psychological law of primacy (we tend to believe the first explanation we hear, even if we hear a better one later). There are some very slick charlatans out there who sell people on these tax schemes. It should tell you something that most of them are not in tax trouble, because... they pay THEIR taxes even while telling you not to pay yours.
And yes, when the income tax first came out, it targeted only large incomes; it has since crept downscale to where most politicians rave about "soaking the rich" they mean raising taxes on middle-class couples who both work.
Guess what? To make the Social Security System whole, they're going to have to add (if they do it now) another 12.4% on everyone making $100k or more. If they wait longer, they'll have to raise the tax higher or set the income level lower.
The problem is, like a lot of these people I read about facing foreclosure on houses, the government (spelled Congress, mostly) likes to spend money on shiny things and never worries about where the money's coming from. We've just seen a sitting Senator indicted on seven counts of corruption, but the prosecutors could easily have had 100, counts that is, or 100, Senators -- they're all free with your tax money because of the money it brings in to them personally.
In the long run, a government, like a business or a family, has to live within its means. The US already has one of the highest tax rates in the developed world (and if one of the Presidential candidates implements his tax program it will be the highest, bar none). Our corporate tax is the highest in the civilised world. Exxon Mobil, for instance, pays 41% on its profits. (In much of the world, oil companies are state-owned and pay bupkus). Our average corporate tax is 35-36%. That and Sarbox is why there were no IPOs on NASDAQ last quarter (!). By piling taxes and regulations on corporations, politicians seek to hide the true cost of government from voters.
Your income tax isn't half of it. If you work for a company, the Social Security and Medicare taxes you see are only half of what you're actually paying -- the company pays the other half for you. Money they can't give you in salary (if you're self-employed like me, you have a better handle on what bite taxes really take).
Our combined tax and regulatory burden means that you worked for the Government, Mr and Ms Average American, until July 16th this year. That's not a sign of a healthy economy, and wait till the pols get their way and the "rich" have a marginal tax rate of 70+ % again. What that does is, incentivize those who are not rich to stop trying to get rich (bad for the economy), and incentivize the rich not to invest money here (worse for the economy). You're never going to get a job from a bum, you get it from a wealthy man or woman, or from a company that has a vote of confidence in the form of investment, from the wealthy or at least those with enough surplus wealth to dare invest.
cheers
-=K=-