VATs shuold only be put into place to replace the income tax, not to act as an additional tax, IMO. Note that VATs help increase the size of government because they hide the rate of taxes that people are actually paying.
Economic theory says that a pure tax on consumption will have the same effect as a pure tax on income. Think of it this way, money is only as good what it can buy. If goods are more expensive because of the tax, incomes have gone down just as low as if the incomes were taxed directly.
On the other hand, in our imperfect world where there are no perfect, pure taxes, VATs might help our domestic manufacturing. While income taxes are taxing jobs, VATs tax goods. Our exports have the cost of labor (which includes the taxes paid off of that labor) wherever they go. When our domestic goods reach countries that have the VAT, they are taxed the VAT after already having a high cost due to our income tax.