> But none of them pay VAT on the intermediate goods; that's on the final consumer. This is not true. This describes how sales taxes work in the US - sales tax

> But none of them pay VAT on the intermediate goods; that's on the final consumer. This is not true. This describes how sales taxes work in the US - sales taxes are due on retail but not wholesale transactions. VAT is due on each transaction in the chain - manufacturer to wholesaler, wholesaler to retailer, retailer to consumer. However, the wholesaler can deduct the VAT that it paid to the manufacturer from the VAT that it passes to the government and the retailer can do the same for the VAT that it paid to the wholesaler. In this way, there is no multiple taxation of the retail sale. GST and PST (despite the latter's name) in Canada work the same way.