  Under conditions of market equilibrium, the distribution of capital income
follows a Pareto power law, with an exponent that characterizes the given
equilibrium. Here, a simple taxation scheme is proposed such that the post-tax
capital income distribution remains an equilibrium distribution, albeit with a
different exponent. This taxation scheme is shown to be progressive, and its
parameters can be simply derived from (i) the total amount of tax that will be
levied, (ii) the threshold selected above which capital income will be taxed
and (iii) the total amount of capital income. The latter can be obtained either
by using Piketty's estimates of the capital/labor income ratio or by fitting
the initial Pareto exponent. Both ways moreover provide a check on the amount
of declared income from capital.

Economics;Physics and Society