Court decision could shake the IRS

This story from Townhall.comwas brought to my attention by Drnaline on Conflictingviews.com .
Wonder if the ruling will stand and help in the efforts to curb the IRS and get us closer to a national sales tax ?

Here is a small part of the article by Bruce Bartlett at Townhall .
"Last week, a federal appeals court in Washington handed down an important decision relating to the definition of income for tax purposes. What is important about the decision is that it is the first one in decades saying that the Constitution itself limits what the government may tax. If upheld by the Supreme Court, it could significantly alter tax policy and possibly open the door to radical reform.

In the case, a woman named Marrita Murphy was awarded a legal settlement that included compensation for physical injury and emotional distress. The former has always been tax-exempt, just as insurance settlements are. Obviously, it makes no sense to tax as income the payment for a loss that only makes one whole again. One is not being made better off, and therefore there is no income. But under current law, compensation for non-physical injuries are taxed. "