He argues that the best form of economic justice is free-market capitalism. ![]() He explains how wealth redistribution does not incentivize or stimulate economic growth. He breaks down why a wealth tax is not the “economic justice” solution that some politicians promise it to be. In this interview on the Area 45podcast, Cochrane analyzes President Trump’s economic policies discussed in the 2019 State of the Union address and Democrats’ wealth redistribution proposals, and whether they constitute sound economic policies. He explains that simplification is more important than rates, because “a simple code would allow people and businesses to spend more time and resources on productive activities and less on attorneys and accountants, or on lobbyists seeking special deals and subsidies.” A simpler tax code with therefore be inherently fairer than the complex system currently in place. The best way to achieve this is by simplifying the tax code. He asks, “How much is the most anyone should have to pay? When do taxes indisputably start to harm the economy and produce less revenue-when government takes 50% of people's income? 60%? 70%?” If there is a maximum amount that an individual pays, then once past that cap they wouldn’t pay any further federal income tax for that year.Ĭochrane breaks down the ideal tax structure in his article “ Here’s What Genuine Tax Reform Looks Like.” He argues that the first goal of taxation is to raise the necessary amount of government revenue while causing the minimum of economic damage. ![]() In a Wall Street Journal op-ed, “ America Needs an Alternative Maximum Tax,” John Cochrane proposes a new kind of tax that caps the amount that people would pay in taxes to prevent indefinite tax-rate hikes.
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