No. It won't kill income tax. The taxes we have to pay for purchases is a lot.
Even if I have to give 0.01$ to my friend , including the fees and all I will have to pay around 0.15$.
That's a lot of fees/tax. But in the near future if this problem is solved , then it might kill income tax.
There were transactions that have transaction fees , thus this fees refer also for taxes, this fees deducted were deducted also for the tax of the apps,companies or banks that were using our btc, like on sending money and cashing out. Those in built organizations pays our taxes in our behalf.