AI is worsening wealth inequality, creating 'gated recessions' where segments suffer despite healthy aggregate economic data. The US shows discouraged workers and shrinking real incomes, while India faces high youth unemployment amidst national growth. This divide, enriching the ultra-rich and tech, necessitates policy action. The author advocates higher marginal taxes on super-rich fortunes, inheritances, and incomes, rather than impeding AI. This strategy aims to broadly share technological gains, countering fragmentation and rectifying policy failures for a balanced economy.