Topic: Consumption Tax

Reports on the "minimal consciousness" of Dutch Prince Friso following a skiing accident are briefly mentioned. The discussion shifts to a *Morning Joe* segment where guests proposed a consumption tax (VAT) to address the fiscal cliff. The hosts challenge the claim that government spending is only 24% of GDP, asserting the true figure is closer to 40% when all factors are included.

Gary Johnson advocates for the "Fair Tax," a plan to abolish the IRS, income tax, and corporate tax in favor of a single 23% federal consumption tax. The hosts discuss the potential benefits and risks of this system, noting that the U.S. government was primarily funded by tariffs prior to the 20th century. They jokingly suggest running a 2016 presidential campaign via Kickstarter based on a value-for-value model.

A debate on John Stossel's program regarding a "consumption tax" is analyzed. The proposed tax is distinguished from a Value Added Tax (VAT) by being an "expenditure tax" that shields savings and investments. Critics argue this system would require the government to track all personal spending and would ultimately favor Wall Street by penalizing those who do not invest in traditional financial products.

The complexity of the US tax code is contrasted with the brevity of the Constitution, noting that simplification efforts often result in more complicated laws. One host recounts taking courses to become certified for tax preparation years ago but admits the current system is too dense for non-experts. A consumption tax is proposed as a superior alternative that would encourage savings.

Mike Huckabee's proposal to replace the income tax with a consumption tax is debated, with references to the Value Added Tax (VAT) systems used in Europe. While a consumption tax might capture revenue from the "gray market" and drug dealers, it is criticized for potentially creating a large black market for services. Personal anecdotes regarding the difficulty of managing payroll paperwork for small businesses are used to illustrate why people often prefer "under the table" cash payments.