[SolidSupplySide]

When the drug seller pays for other goods, such as cars, clothes, et cetera, the proceeds of his transaction get taxed at that point.

That is true regardless of whether we have a sales tax or an income tax.

You are describing a transaction in the legitimate economy. Transactions in the underground economy such as drug deals don't get taxed by either a sales tax or an income tax.

[Poohbah]

It just that the legitimate transaction, today, is taxed in an obnoxiously stupid manner.

[balrog666]

And what's your assessment of this idea:

(Under the NRST) The price of domestic goods would fall dramatically, and the price of foreign goods would rise.

[sheltonmac]

"Transactions in the underground economy such as drug deals don't get taxed by either a sales tax or an income tax."

From what I understand, the huge taxes placed on tobacco products actually helped create a burgeoning black market for cigarettes.