I dont think Cruz is talking about a VAT. This is being used to smear him, as he wants a national sales tax.
The national sales tax incentives retail production instead of retail consumption.
If we give up on repealing the 16th amendment, it is all over. We will continue to import welfare cases, the socialists will take over and everything moves will taxed. A VAT will be included to pay for the ‘free’ college.
The retail sales tax also has the feature of broadening the tax base, including illegals who drink cerveza.
As far as Trump goes, I am ok with hedge fund managers paying on income instead of on cap gains. But it wont stop there- we would likely end up with FDR style brackets again and ‘shelters’. Remember the original 1913 income tax was only for the ‘rich’. Today that would translate to only those who make millions per year.
Of course, once the premise of income tax was accepted, we got withholding from FDR and lower brackets. Then it was off to the races for government intrusion.
First of all a free people don't want the government to use tax to "incentive" anything. The best incentive is freedom from government interference and coercion.
Secondly, a "national sales tax" (NST) should be limited to the final customer purchases at the cash register. Anything else especially upstream form the final purchase is VAT and "incentives" undue government intrusion and interference as well as more hidden tax. So you need to do away with the terminology of "production" as well as "consumption" and until the 16A is repealed, the whole discussion of NST.