We propose a canonical model of optimal nonlinear redistributive taxation with matching unemployment. In our model, agents are endowed with different skill levels and labor markets are perfectly segmented by skill. The government only observes negotiated wages. More progressive taxation leads to wage moderation that boosts labor demand. We design the optimal nonlinear redistributive tax schedule in the absence of welfare benefits and extensive labor supply margin. Compared to their efficient values, at the optimum gross wages and unemployment are lower. Average tax rates are moreover increasing in wages. The robustness of these properties is also discussed.

We build a theoretical model to study whether a minimum wage can be welfare-improving ifit is implemented in conjunction with an optimized nonlinear income tax. We consider thisissue in a framework where search frictions on the labor market generate unemployment.Workers differ in productivity. The government does not observe workers' productivity butonly their wages. Hence, the redistributive policy solves an adverse selection problem. Weshow that a minimum wage is optimal if the bargaining power of the workers is relativelylow. However, if the government controls the bargaining power, then it is preferable to set asufficiently high bargaining power.

This paper characterizes optimal non-linear income taxation in an economy with a continuum of unobservable productivity 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 rates are increasing. Marginal tax rates are positive, even at the top. Finally, numerical simulations suggest that redistribution is much more important in our setting than in a comparable Mirrlees (1971) setting.

This paper investigates the effect of tax progression on labour market outcomes in an equilibrium search model with wage bargain and endogenous training decisions. We find that the effect of tax progression on training depends crucially on which party invests and the tax function that is considered. When the firm invests, a higher tax progression may increase training levels. Moreover, when a complete contract is possible or when the firm invests, the optimal tax rate in a model with endogenous human capital is at least as high as in a model with exogenous human capital.

Resume L’objet de cet article est de comparer les profils optimaux de taxation optimale non lineaire des revenus du travail selon que les distorsions passent par l’offre ou la demande de travail. Avec des agents identiques, contrairement au canal de l'offre de travail, la prise en compte de frictions et de salaires negocies n’implique pas des taux marginaux optimaux nuls. Les simulations numeriques etalonnees sur la France avec un continuum d’agents aux productivites differentes suggerent que la redistribution est beaucoup plus importante lorsque les distorsions passent par la demande de travail.