Like most people, there are a handful of popular terms, words, and phrases that strike me as odd. Of course, once that identification process takes place, I have to fight to not roll my eyes every time I hear or read them. This will be the first in a series until I get tired of writing about them.
Earned Income – What other kind of income is there? Do you have any income that you do not “earn?” I sure as heck don’t. Just so you know, if you risk your money and invest in a stock that actually increases in value and then you sell it for a profit, you did not “earn” anything according to the government. In this scenario, you actually “gained” something they like to call “capital,” which is a fancy word for money. Let’s get this straight: if you operate heavy equipment or go to the office and work for “the man,” it is actually income that is “earned,” but if you risk your money to invest in a stock and actually earn a profit, it is not to be considered as “earned.” Let’s face it, the reason the IRS distinguishes between the two is so the political influence of the most recent regime can tinker with one or the other (earned vs. capital gain). Of course, they do this in order to penalize or reward the have’s or the have not’s. The government also takes great pride in deciding if you actually “earned” your income, or if you “gained” it from evil, capitalistic means.
If we can implement the FairTax (H.R. 25), none of this matters (I am still not ready to rant about The FairTax, but take some initiative and read up on it yourself, will ya? I recommend you start with the book and also the actual Bill itself, which you can find online. It is H.R. 25, also called “The Fair Tax Act”).