Even if you ignore the resistance to handouts the idea that the federal government in its current state or any reasonably probable future state could pull off administrating said handouts without it devolving into a bunch of special interest BS and partisan bickering and actually accomplish the goal of making a VAT a regressive pain in everyone's butt is just laughable.
Look at healthcare spending. Look at social safety nets. Look at defense. Odds are that any spending in an attempt to make VAT less regressive would wind up looking a lot like those and having most of the same problems because it would be subject to the same sets of perverse incentives from top to bottom.
Every time a new handout gets created, there is a predictable round of complaining from the fiscal conservatives, but fiscal conservatives make up only about 10-15% of Republicans and 3-5% of Democrats so inevitably the handout eventually gets passed, perhaps with a name-change or some token constraint, but then once established becomes normalized and permanent.
