Just to go back to this point... sales taxes, such as those they use in the US, are no more effective than VAT because they are open to "tax cascading".
VAT doesn't change depending upon the number of steps in the manufacturing process of an item whereas sales tax is levied on each stage, thereby meaning that consumers at the end of the chain are paying taxes on something that has already had taxes levied on it at each stage of its production.
As an example, imagine you buy a bike - it's made up of a frame, 2 wheels, a seat, pedals, handlebars, a chain, etc... For simplicity, we'll say that sales tax is 10%. Each individual component of the bike that is manufactured is taxed when bought from the supplier (or when the raw materials are purchased if they are manufactured rather than bought as an end product). The wheels cost £1 each excl sales tax, or £1.10 including tax, multiplied by 2 = £2.20. The frame costs £10 + £1 sales tax, the chain costs £0.50 + £0.05 sales tax, etc.. etc.. etc...
Overall, let's imagine the bike costs £50 excluding sales tax. Because sales tax is levied at each stage, though, the total cost is £55. However, when a consumer buys the bike at £55, sales tax is again applied making the final cost £60.50.
Now let's imagine that VAT has gone back to 17.5%. The same bike built from the same components from the same manufacturers still costs £50 excluding VAT. VAT isn't added at each stage of the manufacturing process, so the total cost remains £50. When a consumer buys the bike, VAT is applied at 17.5% which makes the final cost £58.75.
As you can see, from the perspective of a consumer, VAT is actually a fairer tax than sales tax because you're not getting taxed on something that tax has already levied against.
