Pareto's law for income of individuals and debt of bankrupt companies

We analyze the distribution of income and income tax of individuals in Japa n for the fiscal year 1998. From the rank-size plots, we find that the accu mulated probability distribution of both data obey a power law with a Paret o exponent very close to -2. We also present an analysis of the distributio n of the debts owed by bankrupt companies from 1997 to March 2000, which is consistent with a power law behavior with a Pareto exponent equal to -1. T his power law is the same as that of the income distribution of companies. Possible implications of these findings for model building are discussed.