ASYMMETRIC TAXATION AND THE THEORY OF THE LABOR-MANAGED FIRM

This note analyzes the implications of tax asymmetry for the theory of the revisited LMF, both in the short run and in the long run. It is shown that asymmetry in income taxation will not affect the LMF's short-run employment policy; however, it will affect long-run decisions, and may thereby affect short-run production. The LMF's behavior is then compared to that of its capitalistic twin. © 1991.