This paper investigates the redistributive potential of capital taxation in an intertemporal maximizing model of capital formation. The main findings are: 1. **Unanticipated Capital Taxation**: Even unanticipated increases in capital taxation are ineffective in raising wages due to the depressing effect on labor demand. 2. **Long-Run Optimal Tax**: If both workers and capitalists have the same rate of time preference, any convergent optimal redistributive capital tax will asymptotically converge to zero, regardless of factor supply elasticities. 3. **Short-Run Political Process**: If worker-dominated legislatures control only short-term tax rates, the equilibrium of the resulting game among legislatures will generally result in substantial long-run taxation. The paper uses a perfect foresight model where capital accumulation is determined by the maximization of a dynamic utility function for capital owners. It examines the impact of anticipated and unanticipated tax changes on worker welfare and the political process. The results suggest that redistribution through capital income taxation is effective only if it is unanticipated and will persist only if workers cannot commit to low taxation in the long run. The true long-run burden of a factor income tax is not well represented by the long-run impact on net-of-tax factor prices.This paper investigates the redistributive potential of capital taxation in an intertemporal maximizing model of capital formation. The main findings are: 1. **Unanticipated Capital Taxation**: Even unanticipated increases in capital taxation are ineffective in raising wages due to the depressing effect on labor demand. 2. **Long-Run Optimal Tax**: If both workers and capitalists have the same rate of time preference, any convergent optimal redistributive capital tax will asymptotically converge to zero, regardless of factor supply elasticities. 3. **Short-Run Political Process**: If worker-dominated legislatures control only short-term tax rates, the equilibrium of the resulting game among legislatures will generally result in substantial long-run taxation. The paper uses a perfect foresight model where capital accumulation is determined by the maximization of a dynamic utility function for capital owners. It examines the impact of anticipated and unanticipated tax changes on worker welfare and the political process. The results suggest that redistribution through capital income taxation is effective only if it is unanticipated and will persist only if workers cannot commit to low taxation in the long run. The true long-run burden of a factor income tax is not well represented by the long-run impact on net-of-tax factor prices.