NRST: John Doe and nine of his buddies visit Miss Mable down the street and pay her for her "professional services". ALL of them pay with money not previously taxed and Miss Mable and her pimp pay when they make purchases of LEGAL goods and services
Sorry, those are two different scenarios. For some reason you don't explain under the current system, when the pimp and Miss Mable spend their money on legal goods, they are then buying goods embedded taxes on them and taxes do get paid. You stopped when the pimp and prostituted collect their money. If you stopped in the same place under your second example, Miss Mable and her pimp would have provided a service and not collected and remitted the required sales tax. So no tax was paid up to that point. You do an apples to oranges comparison and have the nerve to say we don't get it......An apples to apples comparison tracking the transactions to the same point shows that taxes are paid and/or avoided in a similar manner under both systems. Really you have no legitimate argument, but I realize you will persist you do.
Perhaps I did not make myself fully clear. In the post you reference under the income tax scenario, "...other than those embedded in the prices of products which her customers also pay when they buy those products." should have read "other than those taxes embedded in the prices of legal products she may purchase which her customers also pay when they buy those products."
I will leave it to others to judge the validity of arguments posted here.