Bryan Conway JD, PMP
You bring up some good points.
With a flat sales tax, the enforcement would simply flow from auditing income tax returns to tracking sales. The IRS would have to be rebuilt. Enforcement of the sales tax on the internet would originally be difficult, sort of like internet gambling was difficult to control for several years, and the government would most likely have to enforce the sales tax by cracking down heavily on credit card companies that facilitate sales tax evading transactions (foreign and domestic).
As far as the feds imposing themselves on retailers: the local and state governments are already collecting sales taxes, so it really isn’t imposing a huge burden to calculate and pay the federal sales tax as well.
Despite the inevitable efforts to avoid paying the federal sales tax, I believe that most of the country would comply with the law and pay it. Right now taxpayers are passively paying 30, 40, 50% or more of their income to the local, state, and federal governments with barely a peep, so I don’t think we’d all go rogue if the sales tax was comparatively reasonable (I know, that’s a big “if”)! I guess it would get sticky if the federal income tax was abolished and replaced with a sales tax while the local and state income taxes remained. I don’t believe that the federal government could impose an end to non-federal income taxes, so income tax payments and returns would still be required, which wouldn’t exactly fix the overall process!