>The other issue is that many businesses can claim back the VAT along the way, meaning the cost increase happens at the point where the consumer opens her purse, not every step along the way.

Exactly. It is almost entire little niche market having good software that handles these things.

>
>And as for the specter of gradually raising VAT as one of the experts proposed: the opposite seems more true recently. E.g. the UK government reduced VAT to assist the economy to weather the current crisis.

As to bust spenditures ?
They could have been a bit more creative if you ask me, then just following American way ;)