Administrative Problems of Tax-Based Incomes Policies

Emil M. Sunley and

EMS

Emil M. Sunley Department of the Treasury

Larry L. Dildine

LLD

Larry L. Dildine Department of the Treasury

Discussants: Joseph A. Pechman and

JAP

Joseph A. Pechman The Brookings Institution

Richard E. Slito

RES

Richard E. Slito

ALTHOUGH 1977 was a good year economically, unemployment and inflation are still serious problems. Over the last few months the outlook for inflation has worsened. Many believe that traditional monetary and fiscal policies will not be sufficient to do the job, as George Perry makes clear in his paper in this volume. And as Laurence Seidman suggests, novel tax incentives or disincentives are being advocated to provide a carrot or a stick to hold down wage and price increases. These tax-based incomes policies (TIPs) would permit a more aggressive use of monetary and fiscal policies without having to rely on direct controls to moderate wages and prices.