Although the relationship between democratic rule and income inequality has received important attention in recent literature, the evidence has been far from conclusive. In this paper we explore if the redistributive effect of democratic rule is conditional on state capacity. Previous literature has outlined that the pre-existing state infrastructural power might be necessary for redistributive policies under democratic rule. In contrast to that intuitive view, we argue that democratic rule combined with high state infrastructural power produce higher levels of income inequality, through their positive effect on investor confidence, Foreign Direct Investment inflows and financial development, which favor income concentration to the top. By making use of a novel measure of state capacity based on cumulative census administration, we find empirical support for these claims using data from 184 industrial and developing countries between 1971-2016.