@Eomund
Yes, organized crime already exists and makes a lot of money. With a high sales tax they will however gain another way to make money. Instead of drugs now they can make money on any good imaginable. And shopping abroad really isn't that hard nowadays. Ever heard of the internet?
About you expecting not having to pay more taxes because the new system will encourage economic growth, I disagree. First of all this isn't certainly happening, because you will get more money in your pockets, but goods are also more expensive, which offset each other. Of course economic growth can be stimulated by lowering the tax rate, but the same applies to the current tax system. On another note, being completely dependent on sales tax for its income seems to make the government more susceptible to economic trends, with could cause a quickly increasing budget deficit in case of a recession.
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