We study the role of anonymous markets in which trades cannot be monitored by the government.

We adopt a Mirrlees approach to analyze economies in which agents have private information and a

benevolent government controls optimal redistributive tax policy. While unrestricted access to

anonymous markets reduces the set of policy instruments available to the government, it also limits

the scope of inefficient redistributive policies when the government lacks commitment. Indeed, the

restrictions that anonymous markets impose on the optimal fiscal policy, especially on capital

taxation and the history-dependence of income taxation, can have positive welfare effects in this

case.