Every time the government tries to track down, people will find a way to get around, and they'll do it just so they can defy the government.
And this is different from the current system, with its 15-25%(as percent of GDP) cash underground and illegal trade how?
The issue in not on how oppressive a government must be to extract the last drip of blood for a turnip.
The fundamental is what kind of tax system is appropriate to fund a constitutionally limited government of a nation that is rooted in principals of personal liberty, and protection of the rights and property of the citizen, not the empowerment of government.
If the revenues are sufficient to the legitimate constitutional functions of federal government, then no more burden than that should be expected to be extracted from the citizen.
A retail sales tax system administered by the states provides the necessary buffer and protection of the individual citizen, while assure that level of funding necessary to the proper exercise of constitutional powers of government.
The federal government is still exercising undue authority on the state's, by telling them, you will have this law, you will collect for us, there's no way around it.
That is firmly against the principles of state's rights.
You still have a federal government bureaucracy, my solution (which is somewhere on this thread, but I'll repeat)
The only federal functions should be the military and some base law enforcement
Everything else goes to the states, they want a welfare state in their state boundary, lovely, they want to create a Libertarians paradise, so be it.
Each state would contribute a percentage of it's revenue, however it decides to collect it, to the feds for law enforcement and defense.
Part II: What do you do if a governor decides, we're not complying with the sales tax. Are you really willing to send in federal troops to protect a national sales tax.