How does vat work in France?

Why do so many Quorans (presumably American) misunderstand how VAT/GST taxes work?

• There seems to be a common misperception that VAT effectively compounds at each stage of production. So a VAT of 20% is paid by the primary producer, then again by the manufacturer, the wholesaler and the retailer, and the total tax take would be well in excess of 20% by the time the consumer buys the item. The input tax credit system, and indeed the meaning of the words "Value Added" seem to be missed by many (hint: the total tax paid ends up being exactly 20%, because each stage gets to claim the tax back from the stage before). Is this because VAT is particularly complex and unfamiliar to Americans (I say Americans because I think most other countries have a VAT, so probably understand it), and there has been a lack of education about it? Or is there some conscious misinformation campaign going on in the US to try to scare people about a VAT?

• Answer:

  We have sales tax. I buy a printer, I pay sales tax. I use the printer to print an income tax return that I sell to you. You pay sales tax. There's no subtraction from the sales tax my customer pays for the sales tax I pay.  We pay sales tax every step of the way. If I go to a state that has no  sales tax and buy a freezer, I have to claim it on my tax return for my  state and pay a "use" tax instead of the sales tax. I pay it. Period. That's why VAT is hard to explain to Americans. We don't have it. We assume it's like our sales and use tax. It would be rather killer if it were.