Pimps buy Coca Cola.
Shady businesses buy Coca Cola.
All these scumbags would be paying tax under a national sales tax plan. Currently, whores, pimps, drug dealers and millions of shady businesses avoid income taxes in the underground economy.
You've got to understand that people with legitimate jobs visit whores, buy drugs and patronize shady businesses.
Whores, drug dealers and shady businesses won't collect and remit sales taxes under a sales tax regime. Furthermore, the legitimate income earned by the john, pot smoker or patron of a shady business won't be captured by an income tax anymore, either. And lastly, Coca-Cola, its bottlers, distributers, shareholders, retailers, etc., are already paying income tax on sales to drug dealers and whores.
Looks like when it comes to the underground economy, the sales tax strikes out.
I agree that the "tax the underground economy" angle is probably a net wash (I'd hardly call it "stikes out"). However one area the NRST would beat the income tax is in taxing illegal immigrants -- these are currently cash-under-the-table employees, but who buy goods and services from retailers.