Once the government collects income tax from the individual, it doesn't come calling. It doesn't care where your money is, so long as you pay.
Sure, that is why the government has brokers and savings institutions provide 1099s on any returns from your sources of investments and savings, and keeps rather close track of said earnings potential.
I would much rather government totally out of my personal financial life. They simply have no legitimate need for such information where taxes are for the clearly state purpose of paying the bills with no mandate to track the citizen's wealth or income data whatsoever. Funding sufficient revenue for the execution of the constitutional functions of government requires no such tracking of individual citizen's household financial activities.
Your Broker, Inc. will report every transaction they collect on. Time, Date and Amount and you can bet the Who will be included.
With no legal or functional requirement to report individual information in the remittance of any retail sales tax to state tax administrators.
Your Broker today is required to report such data in filing 1099's because individual income taxes mandate such reporting to work.
Retail sales taxes have no requirement as is very apparent in the manner in which states have historically collected such taxes through businesses across the history of this country without needing or looking for such detail as you describe.
Sorry, your argument holds no water. The current system does all you argue is a problem with a National Retail Sales Tax. Yet a retail sales tax does not and never has required individual levels of reporting to facilitate state collection of said revenues through businesses.
The FairTax does not implement such individual tracking, as no retail sales tax needs it. The FairTax uses the states as is administrators interfacing with local business in collection of the national retail sales tax. The feds are isolated from the individual through a two layer buffer and have zilch connection to information traceable to individual transactions, and that is the way it should be.
The income tax on the otherhand, we all intimately know to be otherwise, as was predicted on the change over from federal dependence on consumption taxes to the nearly exclusive (94%) dependence on the modern income/payroll tax that inherently demands individual tracking by federal agencies:
"A hand from Washington will be stretched out and placed upon every man's business; the eye of the federal inspector will be in every man's counting house....The law will of necessity have inquisical features, it will provide penalties, it will create complicated machinery. Under it men will be hauled into courts distant from their homes. Heavy fines imposed by distant and unfamiliar tribunals will constantly menace the tax payer. An army of federal inspectors, spies, and detectives will descend upon the state."
-- Virginian House Speaker Richard E. Byrd, 1910, predicting the consequences of an income tax.
Yet a retail sales tax does not and never has required individual levels of reporting to facilitate state collection of said revenues through businesses.
Great! The government will just take everyone at their word. I don't think so.
Do you plan to accept your share of prebates in which every US household is essentially on a welfare program getting a monthly dole check from Uncle Sam? Or do you want off the database?
The National Sales Tax is not going to be a burden taken off your shoulders and dumped on the big Wal-Mart in the sky.
Millions of business people in this country are going to become tax collection and reporting agents when they are not now. (And please don't go into payroll taxes again. For the average business owner, they are not comparable to making a daily accounting for payment of sales tax.)
If you think a "business" is only your local Wal-Mart, may I remind you that after the government, most people in this country earn their living from small businesses -- not the giants.
I would simply invite you to consider how much your life would change if you had to report to the government every nickel that fell into your hands on a given day, and multiply that task by the hundreds of transactions for the small business owner. I don't see how tracking individual transactions can be avoided as there must be some accounting control to verify sales and the amount of tax owed.
This transition will not be painless.