 Income is what people make over a given period. So for example, you work, you earn a salary. Wealth, in contrast, is a stock of all the assets that you've accumulated, a house, pension funds, from mutual funds, stocks, bonds. Wealth is much more unequally distributed than income. The bottom half essentially owns no wealth. I am Emmanuel Saez. I am a professor of economics at the University of California, Berkeley. All human societies have been really affected by issues of inequality. Taxes are the way modern societies organize, putting together resources for the public good. But second, it also plays a major role in the regulation of inequality. The US used to have the most progressive tax system in the world with very high tax rates at the very top, all the way to 60%, 70%. Since the 1980s, there has been an erosion of tax progressivity so that today the US tax system is no longer very much progressive at all. So the argument in favor of reducing tax progressivity is that if you tax the rich less, you are going to give them more incentives to work harder, do new innovation that is going to benefit society. Reducing taxes on the rich has allowed them to capture an increasingly large fraction of total income, and we don't see in the data any positive benefit or trickle down to the bottom of the distribution. What has happened? The growth becomes very unequal. Why is it that we may want to reduce wealth concentration? It is essentially because in any society, high wealth means power. You can use your wealth to influence the political system. So instead of having the situation where you have one person, one vote, which is the bedrock of democracy, if you use your economic power to influence things, it's more like one dollar, one vote. Historically, we've seen that the development of very progressive taxation was the crucial factor that allowed advanced economies to move from situations of very high income and wealth concentration towards much more equality. Societies choose their level of inequality and the level of tax progressivity. You often hear that in this globalized world, it's become impossible to tax the rich, try to tax them and they will move away or they will use their resources to avoid taxes. Our careful study of history and the current situation tells us if we want to, we can tax the rich. If we want, we can.