What is the optimal shape of the income tax schedule? This paper compares the optimal (Mirrlees) tax and transfer policy to various simple parametric (Ramsey) alternatives. The environment features distinct roles for public and private insurance. We explore a flexible class of social welfare functions, one special case of which captures the taste for redistribution re ected in the current tax system. Optimal marginal tax rates generally increase in income, a pattern qualitatively similar to the U.S. system, and are neither flat nor U-shaped. The optimal tax schedule can be well approximated by a simple two parameter function that is easily communicated to policymakers.