optima, non-linear income taxation is a key complement to unemployment insurance. According to the level of the workers …

levels and endogenous involuntary unemployment due to frictions in the labor markets. Redistributive taxation distorts labor … demand and wages. Compared to their efficient values, gross wages, unemployment and participation are lower. Average tax …

We propose a canonical model of optimal nonlinear redistributive taxation with matching unemployment. In our model … efficient values, at the optimum gross wages and unemployment are lower. Average tax rates are moreover increasing in wages. The …