Insurance for Labor under a Tax-Based Incomes Policy
Economists and policymakers have recently begun to give serious attention to a tax-based incomes policy (TIP) [4, 6–11, 14, 15]. A TIP would provide a tax incentive to employers, employees, or both to reduce wage increases. Advocates believe that TIP plus monetary and fiscal restraint can reduce inflation without increasing unemployment. In contrast to wage and price controls, a TIP would not eliminate the influence of market forces on wage and price decisions at each firm; nor would it involve direct governmental interference in wage-price decision making or collective bargaining at each firm.
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