ABSTRACT
The administrative and compliance problems of tax-based incomes policies have so far been virtually ignored by its proponents. The unit for tax accounting purposes is a legal entity which often bears little relationship to the unit that enters into wage bargains with its employees. While the foreign subsidiary is the extreme case, there are numerous other instances of branches or subsidiaries located in the United States which, as far as wages are concerned, bear virtually no relationship to one another or to the parent firm. It is true that a tax-based incomes policy can be disregarded by any firm and its workers. The decisions made for the excess profits tax in the United States have been the subject of extensive and time-consuming litigation every time the tax was used, and no one in the government or the business side was ever satisfied.
