European Journal of Political Economy volume 10, issue 4, P765-781 1994 DOI: 10.1016/0176-2680(94)90037-x View full text
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Robert A Hart, Thomas Moutos

Abstract: We evaluate firm/union preferences for pure wage and profit sharing compensation under the generalized Nash bargaining solution concept. Emphasis is given to the effects of taxes on income as well as profit and payroll taxes. Taxes are shown to play an important role and their assessment is extended to embrace the effects of payroll tax ceilings. Finally, we consider whether differential labour/capital taxes and subsidies might influence the parties' choice of compensation system