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Robert Shiller suggests raising taxes on wealthy to solve income inequality

Professor Robert J. Shiller acknowledges applause after he received his Nobel Prize from King Carl XVI Gustaf of Sweden during the Nobel Prize Awards Ceremony in Stockholm, Sweden.
Professor Robert J. Shiller acknowledges applause after he received his Nobel Prize from King Carl XVI Gustaf of Sweden during the Nobel Prize Awards Ceremony in Stockholm, Sweden.
Pascal Le Segretain/Getty Images

The average incomes across the United States and worldwide have not been keeping up with the new financial realities of the high tech revolution. Daily as the extremely wealthy corner more and more of the money and power in the United States there are simultaneously more well educated and capable people than ever before being thrown down into the painful and deadly quicksand of poverty. The income inequality which we are seeing is tearing apart the fabric of the American society. Yale's Robert Shiller has said one solution to the growing problem of income inequality is to raise taxes on the wealthy reports Money News on April 15, 2014.

Nobel laureate economist Robert Shiller of Yale University says the tax system should be changed to avoid a worsening of income inequality. According to economists Thomas Piketty and Emmanuel Saez the top 1 percent of households corner 19 percent of the country's income now, which is up from 8 percent in the 1970s. Schiller suggests taxes should be indexed to income inequality with a goal of making them more progressive.

It is the position of Schiller that if we wait too long to make this change an entirely new class of new super wealthy people will most likely feel entitled to their wealth and will than have the means to defend their interests. Washington Post columnist Catherine Rampell has pointed out the growing wealth of the wealthy is now set against the stagnation or deterioration of living standards for just about everyone else.

Business Insider reports that Shiller actually has a solution for exploding inequality in the United States. He points out that although income inequality would be much worse without our current tax system, what we have clearly is not nearly enough. Shiller points out from a psychological perspective this is the time to act on this problem. Psychologists have noted that people are generally more idealistic and generous when they are dealing hypothetically with the distant future than they are about dealing with actions they need to take today. Shiller is right. The present state of rising income inequality in the United States is a national disgrace which is responsible for the daily literal torture and killing of scores of people.