We integrate social exclusion, operationalized in terms of long-term unemployment, into the theory of optimal …, in conjunction with optimal income taxation, contributes to redistribution and reduced long-term unemployment. The second … varies with the government's preferences for redistribution and the characteristics of those risking long-term unemployment. …

In the economic policy debate, income tax progressivity is mostly seen as a means of redistribution. The more … progressive the tax, the more redistribution from the rich to the poor. However, high tax progressivity also means high marginal … lower overall potential for redistribution. Under non-competitive wage formation, there are positive aspects of tax …