BUSINESS
10/22/2014 04:35 pm ET Updated Oct 22, 2014

Paul Krugman: 'Soak The Rich'

Paul Krugman is on board with some other top economists who say that the U.S. should tax top earners up to 90 percent.

"What you really should want to do is to soak the rich as much as possible," Krugman said in an appearance on HuffPost Live Wednesday afternoon. "So the top tax rates should be whatever it is that collects the most revenue, and now the question is, how high is that?"

The Nobel Prize-winning economist was asked about a new working paper by economists Fabian Kindermann and Dirk Krueger, which found that a top marginal income tax rate of 85 to 90 percent would improve all Americans' wellbeing, reduce inequality and bring in more revenue for the government.

Krugman conceded that "soaking" the rich -- using a nickname for the Revenue Act of 1935, which established a post-Depression wealth tax on top earners of up to 75 percent -- is "not going to happen" due to today's political climate.

Today, the top rate of 39.6 percent is paid on income above $406,750 for individuals and $457,600 for couples.

"Any increase in top tax rates is almost certainly a move in the right direction starting from here," Krugman said.

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