The Role of a Tax-Based Incomes Policy
Abstract
A tax-based incomes policy (TIP) is an innovative approach to the inflation-unemployment dilemma. First proposed by Sidney Weintraub and Henry Wallich, a TIP has recently begun to receive serious attention from economists (see Weintraub and Wallich, and Arthur Okun and George Perry). A TIP would provide a tax incentive for the employer, and/or employees, at each firm to reduce the size of the firm's wage increase. Elsewhere (1978a) I have examined the issues bearing on the optimal design of a TIP. In this paper, I will attempt to clarify the role of TIP by focusing on two important aspects: 1) the micro-economic rationale for TIP and 2) the compatibility of TIP with the monetary view of inflation.
- Sources
- openalex