[palmer]

...The honest business owner stands with the government as the accuser thus he too is exposed/transparent and wouldn't wrongfully accuse. Honest business owners don't like dishonest business owners that wrongfully accuse others of cheating on paying the sales tax to gain an unfair/illegal competitive advantage (use the government to attack an honest competitor)...

I'm not sure what I can say except invite you to the flea market. You can talk to the merchants and ask them if they are honest and what they would do to enforce honesty. I have never seen anyone record anything except for most merchants who sell mostly new stuff using a cash box. Presumably at the end of eadh day they can count the cash and record the amount. Remember that tax is always included in the price and the price is often negotiated on the spot particularly when I buy in bulk.

I don't know what prevents dishonest merchants from undercounting their cash. Other merchants would have no idea whether another merchant undercounted or not, I doubt that their receipts are made public. I certainly have no incentive to report what I have purchased, but even if I did, the merchant could pay enough sales tax to cover that.

I have no knowledge of how the state currently enforces sales tax. One possibility is to have undercover agents estimating cash receipts and comparing that to records sent by the merchants. A better possibility is that they track inventory either from the distributors or at the market itself. With a high tax, there will be a great incentive to track it from the distributors since they can force them to either remit sales tax or remit records of buyers. Some people on this thread say that's not necessary but I see it as a distinct possibility. And it still doesn't address the people who make what they sell.

[Ditto]

Keep in mind that no system will ever be perfect. Some people will cheat regardless of what you do. But I surely do not see your flea market example becoming a serious threat to Wall Mart. Unreported retail sales would be several orders of magnitude easier to investigate and penalize than our current underground economy. Some estimate that as much as 30% of income today goes unreported and the IRS only catches a fraction of a percent of the offenders.

[Zon]

From all new product and service purchase in the United States, what percentage of taxable consumption/purchases is from flea markets? My guess is that it's less than one-thousandth of one percent. Something the state sales tax collectors are lax in trying to collect. BTW, I've worked at dozen antique shows for an old employer and another antique dealer that owns and operates the biggest antique/flea market in the area.

I don't know what prevents dishonest merchants from undercounting their cash. Other merchants would have no idea whether another merchant undercounted or not, I doubt that their receipts are made public. I certainly have no incentive to report what I have purchased, but even if I did, the merchant could pay enough sales tax to cover that.

It appears to be a non-problem except for someone (government official) looking for a fishing expedition. Therein lies the greatest potential for abuse, IMO.

A better possibility is that they track inventory either from the distributors or at the market itself. With a high tax, there will be a great incentive to track it from the distributors since they can force them to either remit sales tax or remit records of buyers.

Distributors would have no sales tax to remit and reporting who purchase from the distributor is intrusive, opening potential for abuse and fishing expeditions. On the whole, percentage wise, business owners are more honest than government officials. Just look at who produces the goods and services that people need for survival and you won't find government on that list -- save for protection of individual life-and-property rights from domestic and foreign criminals. ...Valid government services.

Some people on this thread say that's not necessary but I see it as a distinct possibility. And it still doesn't address the people who make what they sell.

It is possible but the probability is decreasing as the pendulum swings with increasing momentum to exposing government abuse and upholding individual life-and-property rights. Addressing the people who make what they sell; are you honest because of threat of government stick or your character development? In light of the honesty/pendulum advantage people -- buyer and seller -- become increasingly repulsed at conspiring to cheat the sales tax. Honesty begets honesty as sure as voting for the lesser of evils begets evil.