The U.S. must overhaul its tax system because lower rates on investment income unfairly punish wage- earners, Nobel Prize-winning economist Joseph Stiglitz said.

“It’s absolutely essential that we have a fair tax system and one that directs our economic activity to production not to speculation,” Stiglitz, a Columbia University professor, said in a Bloomberg Television interview on “Surveillance Midday” with Tom Keene.

“If you have a tax system in which people at the very top pay half the rate of somebody who is working hard for their income simply because they get their income from speculation, that’s an unfair system,” said Stiglitz, 69, who won the Nobel Prize in economics in 2001. “It’s a distorting system. It leads to lower economic growth.”

Stiglitz appeared to discuss his new book, “The Price of Inequality: How Today’s Divided Society Endangers Our Future.”