You just don’t understand VAT.
Read this: http://www.heritage.org/research/reports/2005/05/beware-the-value-added-tax and then let’s talk.
I lived with a VAT in Germany for a total of 7 years. I’m not saying I understand their system perfectly, but I do understand taxing a product at each level of transmission. In fact, we could file paperwork as Americans to receive something like 16% VAT taxes returned on items purchased on the local economy. When you went to the register, you didn’t have the sales tax ring up at 16%.