Worse than a horrible idea. VAT is EVIL. The whole idea is to make sure the end consumers (who pay ALL the tax,since each level includes it in their sale price) doesn't have any idea how much they are paying in taxes. The rate sound low, but for products that have multiple middleman processes, it becomes a huge tax.
If we’re going to use words like “evil” to describe taxes, perhaps we should consider Christian teaching on “just taxes.” We are commanded to pay taxes that are just (Romans 13), but, just as “natural born citizen” isn’t defined within the Constitution, neither is “taxes that are just” defined in the Bible.
For a long time, it was argued that since the role of government is to protect us in our lives and property, that taxes we owed the government to serve in the defense of the community, and to pay taxes in proportion to our wealth. So, something like a flat tax would be just. Or, a combination of taxes on real property and excise taxes (taxes on luxuries) as an approximation.
Then came Communism, and the argument that government should redistribute income (as opposed to merely relieving the needs of those who could not provide for themselves). This corrupted many in the church, and we wound up with progressive income taxation and the welfare state.
Those who do not see the real argument is between the traditional approach to just taxation and the essentially Communist idea masquerading as progressivism, only reveal they do not know who is the real enemy.
Mike Huckabee (fair tax), Ted Cruz and Rand Paul (business income tax/flat personal income tax) and Jeff Sessions (a 2-rate “flat” income tax) have tax proposals that would take a major, major step in the direction of just taxes. Donald Trump’s proposal (which is pretty much what G.W. Bush proposed during his second term) (significant flattening within the current system) also, but not as big a step.
There are lots of details that would have to be examined, and that the Congress will examine in its process. I have some reservations about Cruz’ and Paul’s plan myself, while I think they’re the best ones.