UCGal…you are right. It is fantasy land, but a fun thought experiment none the less.

Eugene,

You do realize that passive income is crucial to a healthy expanding economy? It is not just simply gambling (save commodities), but provides capital to people who have no money but good ideas. Without people making investments (looking for passive income), we would have no economic development. We would have only a fortified wealthy class untouchable by the up and coming innovators. Only in America can you have a good idea with no collateral and have someone lend you millions. Therefore, we should not want to tax either passive income or labor income, but should encourage both.