gotcha, agreed.
Why do you say a flat tax won’t work?
the genius and all of the advantages of the VAT are missing from the flat tax, yet you get all of the downsides.
Even so, the VAT would be better than the other likely alternative: A higher retail sales tax. If the national sales tax were raised to, say, 20%, consumers would cheat by paying cash to avoid it, and retailers would submit because they’d sell more goods by cutting the price 20%. With the VAT, every step of the manufacturing (and tax collection) process is documented.