April 16, 2008 | By Nathaniel Ward

	Featured video Heritage’s Brian Darling looks at important issues like the new GI Bill, Venezuela and Iraq. More videos »

Why can’t Congress get taxes right?

It’s almost embarrassing. Former Soviet Bloc countries, including all the Baltic states, have adopted the flat tax, a modern system of taxation with a simple, low rate of taxation for everyone.

But America is stuck with a monstrously complex tax code—and the prospect of massive tax hikes that will punish hard work and investment.

Just in time for Tax Day, Former Estonian Prime Minister Mart Laar visited Heritage on Monday to discuss the strengths of the flat tax, Heritage’s weblog, The Foundry, reports.

Laar cited two immediate benefits he witnessed when the flat tax was implemented: First, government revenues went up as the simplicity of the new system “killed” tax avoidance; and second, growth skyrocketed. Indeed healthy economic growth has been a staple of the Eastern European countries that adopted the flat tax since the fall of the Berlin Wall, including Bulgaria, Latvia, Lithuania and Slovakia.

So why has America not moved ahead with a simplified tax code?

Asked why he thought the U.S. could not join Estonia in moving forward to flat tax system, Laar said there were just too many established groups with an interest in preserving the current loopholes to block it. He said found it odd that the U.S. president, who has been traveling the world telling people how wonderful the flat tax is, had never tried to implement the policy himself. Even when his party controlled both houses of Congress. “In the end, it is a question of freedom,” Lars said.

Heritage Foundation expert Guinevere Nell explains what steps Congress needs to take towards tax simplification: repeal the Alternative Minimum Tax and stop the massive tax hike when the 2001 and 2003 tax cuts expire. “Repeal of the AMT together with extension of the Bush tax cuts would reduce average effective tax rates and marginal tax rates for all income groups compared to current law,” she explains.

Chairman of the Joint Chiefs at Heritage

Chairman of the Joint Chiefs of Staff Admiral Mike Mullen speaks at Heritage Tuesday.

Even as America makes progress in Iraq and Afghanistan, lawmakers must continue to invest in the nation’s “deterrent and preventative capabilities,” Chairman of the Joint Chiefs of Staff Admiral Mike Mullen said Tuesday at The Heritage Foundation.

» Watch videos of Admiral Mullen at Heritage

Mullen echoed The Heritage Foundation’s call for the United States to set a “floor” for defense spending. He said that devoting at least four percent of GDP to defense, a figure Heritage experts have also cited, would strengthen our position in dealing with potential future security risks.

Touching on Iraq, Mullen said the surge strategy has been successful, as reflected in the declining violence across the country. But we must persevere, he added: “I don’t think we can afford to have a failed state in Iraq.”

—Chris Albright

See Charles Krauthammer in Dallas on April 30

Join the Dallas/Fort Worth Committee for Heritage on April 30 for the Drayer/Wettreich Lecture, featuring conservative commentator Charles Krauthammer.

Space is limited, so register online today!

• Heritage members register here

• Heritage non-members register here

If you are unable to attend in person, you may watch the live webcast on Heritage.org.

Homeschooling should be protected

“A growing number of American families are choosing to homeschool their children,” report Heritage education experts Dan Lips and Evan Feinberg. Up to two million children are education at home, according to some estimates.

The increasing popularity of homeschooling saves taxpayers money, Lips and Feinberg note in their thorough analysis. They note that the practice saves “between $4.4 billion and $9.9 billion in instructional costs each year.”

Homeschooling seems to do well by participating students, they continue, so “federal and state policymakers should protect all families’ right to educate their children at home and implement policies to enable more families to homeschool their children in the future.” They propose a series of policies to advance this goal, including reforms to the tax code and avoidance of regulations that would stifle homeschooling.

Other Heritage work of note

• Protect America. Real immigration reform is being held hostage by those who favor an amnesty-first approach, Heritage national security expert James Carafano explains. “America wants border security and workplace enforcement, along with a legal workforce adequate to its needs, now -- not when it’s convenient for the Congress. The administration must continue to increase border security and more stringently enforce immigration laws.” He adds that “Congress must also streamline current visa programs, raise caps and implement measures to reduce visa over-stay rates.”

• Entitlements. Liberals in Congress are looking to extend Depression-vintage farm subsidies, raise taxes and increase spending, Heritage’s Brian Darling warns.

• Protect America. Heritage national security expert James Carafano testified last Wednesday before a Congressional committee about the Department of Homeland Security’s management challenges. He outlined three short-term goals and two long-term reforms, including improved interagency operations.

• Entrepreneurship. The March jobs report indicates a softening economy, Heritage economists Rea Hederman and James Sherk write. But that doesn’t mean Congress should “do something” and attempt to fix the problem: “Because the government does not create wealth, but only transfers it, Congress has limited power to stimulate the economy.”

• Protect America. All 50 states are now signed up to participate in the Real ID program, report Heritage experts James Carafano, Charles Stimson and Diem Nguyen. “Once the issue of cost was resolved,” they explain, “the states were able to recognize Real ID for what it truly is: a program that makes their state driver’s license’s less vulnerable and thereby makes their citizens more secure.”

In other news

• The White House has indicated it may support a plan to impose government controls on economic activity in order to curb greenhouse gas emissions.

• Silvio Berlusconi’s party handily won Italy’s general elections on Monday. When last in office, the Italian was “a close ally and strong supporter of the U.S.-led war on terrorism and at times a far more effective international leader than a domestic one,” Heritage’s Nile Gardiner wrote in 2006.

• The New York Times reports on the failure of initiatives to expand government-run gambling operations in states like Massachusetts.

• Liberals in Congress want to push through yet another “economic stimulus” plan based on the misguided notion that government handouts can strengthen the economy. History teaches us that lavish government spending does not improve the economy; a better way to solve the problem would be for government to get out of the way and allow individuals and businesses to thrive.

• Offshore explorers have discovered what may be the world’s third-largest oilfield in Brazilian waters. Congress, unfortunately, continues to prohibit expanded offshore energy exploration in American waters.

• Pope Benedict XVI makes his first official visit to the United States this week.

• AFP reports on a new study from the Centers for Disease Control and Prevention: “The teen pregnancy rate in the United States has fallen to historic lows [and] abortion rates have declined dramatically.” But it’s not all good news: “more women are having children out of wedlock, a study published Monday said.”

Coming up at Heritage

To attend these or any other events at Heritage please RSVP at Heritage’s website.  Or you can view these events live online.  All times are Eastern.

• On Thursday, April 17 at 12:30 p.m., Barry Goldwater, Jr. and John Dean discuss their new book, based on the private diary of Senator Barry Goldwater.

• On Friday, April 18 at noon, Georgetown University professor Thomas Farr joins Heritage’s Terry Miller for a discussion of how American foreign policy disregards the importance of religion.

Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation. Chris Albright contributed to this report.

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