I contend that whenever taxes exceed what people think is fair, they will find ways to avoid paying, even if it involves bartering with their neighbor. The definition of "excessive" though varies from person to person.
Perfectly said!
The question then becomes which system, the current income tax or an NST makes more people feel like they are overtaxed and thus are induced to tax avoidance. One of the biggest reasons liberals hate the NST is that there would be no withholding so people would see how much they really earn and in turn have to actually pay with money from their wallet the tax to run the government. This is a great thing if you are a conservative who wants smaller government. As for tax avoidance, who the tax cheats are would change. Wage earners and salaried workers who have their income taxes withheld and have their incomes reported on a W-2 have much fewer opportunities to avoid the income tax. Under the current system legal (and illegal) tax advantages are geared toward business people and investors. Under an NST, tax cheating would be more equal opportunity.
Now the retail side of taxation has the benefit of being able to collect taxes from American and foreign labor somewhat equally. Since the tax is on the product rather than the means of production, American industry need not pay a premium to US workers to overcome the burden of taxation - a premium that makes job deportation more pleasant. Retail tax also gives the buyer the ability to directly control the amount of taxes they pay, through means of their purchasing.
Both plans have some small avenue for "cheating", and I can't really say which one might be more secure. But I can say that either plan would be a welcome alternative to the convoluted, inherently unfair, redistributing, overly complex method we use right now.