I don't know enough about economics to have a good opinion. My opinion is just my gut feeling and I am happy to be educated. I used to think a VAT tax was a good idea but someone here at RedState gave me some links a while back that showed it wasn't.
I just feel that arguing about whether one sales tax is good because it's "physical" and another is bad because it's "virtual" is pointless. I mean, what's the difference? Even online shopping is actually physical shopping, I mean you're still buying something physical. Stuff like reddit gold or Warcraft game time or games on Steam or apps, though, that stuff is really virtual and it would make sense to exempt that.
But if we get all bogged down in drawing arbitrary lines about this being "physical" and that being "virtual" then we are missing the point, which is don't we already have lots of taxes? Why do we need to have sales taxes at all? People who are poor have to pay an extra 5% they can't afford, isn't that more of a burden than whatever benefit they might get from the welfare state?