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Why we need a global wealth tax: Piketty

A global wealth tax and not a consumption tax is the way to go when it comes to fixing wealth inequality around the world, French economist and author Thomas Piketty told CNBC on Tuesday.

Piketty, who laid out that vision in his book "Capital in the Twenty-First Century," said it isn't good for the economy when the largest multinational corporations pay a lower effective tax rate than small- and medium-sized businesses.

"The middle class feels that they are paying more than the very rich. This is not good because at some point later on down the road if you want support for globalization, it's important that broad groups in the population feel that they are benefiting from it," he said in an interview with "Closing Bell."

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Piketty went on to say that there needs to be more global cooperation between countries about cross-border financial assets so that there is an equitable tax system that allows governments to invest in infrastructure and education.

He also told CNBC that billionaire Bill Gates said to him: "'I love your book. I care a lot about inequality but I don't want to pay more taxes.'"

Gates, who gives a lot of his fortune to charity, instead favors a progressive tax on high consumption instead of net wealth, Piketty said he told him.

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However, Piketty thinks there are too many limitations surrounding what defines consumption.

"A progressive tax on net wealth is better than a progressive tax on consumption because first, net wealth is better defined for very wealthy individuals and consumption ... is difficult to define," he said. "This is a better indicator of the ability of very wealthy individuals to contribute to the common good."