Def: "A value-added tax (VAT) is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price." Personal end-consumers of products and services cannot recover VAT on purchases, but businesses are able to recover VAT (input tax) on the products and services that they buy in order to produce further goods or services that will be sold to yet another business in the supply chain or directly to a final consumer, thus helping ALL businesses (big & small) Implementation of a VAT in lieu of an Income Tax would mean people would only get taxed on what they spend, having a choice on cost, rather than a taken from what they make/get.
A VAT Only tax system in America would overtly favor the rich, because it would eliminate all the taxes that affect the rich the most: income, corporate, and capital gains, leaving the poor to shoulder a larger portion of the tax burden than is necessary or fair. How? Because people who are poor don't often have the chance to go out and put money in the bank, they have to spend it on food and other necessities. The VAT tax would have to be increased if it were the only tax in existence in America, which would cause poor people to not be able to spend as much on those necessities.
The actual amount of tax that the end consumer pays is hidden. This is unconscionable and immoral, and a deceptive government practice. By very nature VAT taxes are deceptive. Consider the opinion by OP Vere_Mendacium, a VAT tax taxes a product (or service) at every step in the supply chain. The argument being that at each step, the business pays it but it is recovered when the good or service is transferred to the next element in the supply chain, and admits that ultimately the end consumer pays for the VAT tax.
Let's say for example that the real added value at each step in a supply chain is $1, and the VAT tax is $8%.
Step 1 -> Value ($1.00) -> Cost Plus VAT $1.08)
Step 2 -> Cost Plus Value($1.08+1.00) -> Cost Plus VAT ($2.25)
Step 3 -> Cost Plus Value($2.25+1.00) -> Cost Plus VAT ($3.51)
Three steps into the supply chain the taxes on the end product are already $0.51. On a product with a real cost of $3, that's a 16% tax NOT 8% The end consumer is only aware of the final 8% but still pays the full 16%!. (The price quoted is $3.25 + 8% VAT where the $3.25 already contains a substantial percentage of VAT that's been already paid to the government.)
Most supply chains have many more steps than 3, and this VAT tax compounding can have significant effects. It is possible that the total effective tax paid by the end consumer can be integer multiples of real cost of the good or service, while the consumer is blind and thinks he's only paying a measly 8%.
This practice is deceptive, dishonest, and immoral towards the end consumers, the very people the government is supposed to be protecting from 'greedy' businesses. Governments do this intentionally to raise tax revenue when it is politically inconvenient to talk about raising taxes, and people like the sound of taxing 'greedy' businesses. This really screws the people not the businesses but it is hidden. The honest way is a simple sales tax quoted to the consumer at the end. But typically it is not politically feasible as the tax rate seen by the end consumer would outrage everyone, so instead it's a scheme to hide it.