No one (except the SQL crowd) ever said ALL taxes were embedded in prices.
All those in the underground economy fare much better under the IT system since all they have to do is disguise their income rather than their consumption.
Houses, cars, etc. are a lot tougher to hide than income = and a lot more obvious.
Your beloved Dale Jorgenson says so :
Dale Jorgenson, highly regarded economist of Harvard Univ., has found that 20 to 35 percent of U.S. goods and services are "embedded" taxes; that is, for that $10 item you are buying today, $2.50 is "rolled up" or embedded taxes. This happens because a business must recapture all its costs, plus a little profit, in order to stay in business. So businesses aren't the real "payer" of taxes, they're customers are.
Dale Jorgenson's assumption is what most the NRST analysis is based on. If you accept his assumption, you accept today that a drug dealer pays 20-35% tax on every purchase today. It is a wash.