I used the information from Prof. Randall Holcombe’s paper “The VAT: Too Costly for the United States” to make this chart about the welfare cost of a VAT.

The VAT, like any tax, imposes greater costs on society than simply the revenue it collects. As we can see here, based on Holcombe’s calculations, the net cost of the VAT – the total of deadweight loss and compliance and administrative costs — ranges from $75.5 billion dollars for a 1 percent VAT to $233.8 billion dollars for a 10 percent VAT. These are serious costs.