Edmund Phelps won the Nobel prize in economics, his award came from his work on inflation and unemployment. He did a brief interview with the Wall Street Journal and interestingly enough he is of the opinion that Americans should be paying higher taxes and more should be done to increase the wages of the poor. He actually said
“Over the last couple decades the federal government has virtually abolished taxation of a wide swath of people with smallish incomes. This was a mistake, because we need all the tax revenue we can get. It’s inefficient to have low marginal tax rates on low incomes , because people with upper middle incomes and high incomes get the same breaks, but they don’t get any incentive to work harder. What you want to do is give tax breaks that give people an incentive to earn income that would not otherwise be earned. So in my view, President Bush should have restored the taxes on the low-income people rather than lower the taxes on the high-income people.”