In the given example from A to B to C, there would be 2 VAT charges assessed for the end user to pay for.
If B and C were eliminated from the supply chain, a more vertically integrated A would result, and only a single VAT charge would be assessed. (Have I got this right?)
So there would be greater market pressure for highly vertically integrated businesses, and then the question becomes, is that vertical integration more efficient or less efficient at delivering goods and services?
Wouldn't this have a negative impact on the number of start up small businesses? You know, the businesses that employ the vast majority of the workforce?