OECD: Raise Taxes To Fight Wage Inequality

The Organization for Economic Cooperation and Development, an international think tank, said countries should use tax policy to break widening wage gaps.

PARIS (AP) — A leading international think tank is urging the world's most developed economies to raise taxesand create more jobs to address growing income disparities.

The Organization for Economic Cooperation and Development says that the incomes of the richest 10 percent grew faster than those of the poorest 10 percent in most of its member-countries over the past two decades.

In a report released Monday, the OECD says that most of the inequality could be traced to differences in wage increases. The report says the best way to offset that disparity is to use tax policy to redistribute incomes and benefits.

But the report also noted that, amid the global financial crisis, several governments are slashing their benefits and suggested that inequality could also be reduced by creating more jobs.