There may be reasons unrelated to investment risk.
For example, the risk of losing an earned income stream because my (assumed honest) employer (fires me, goes bankrupt, etc.) seems much higher than the risk of losing an unearned income stream based on my investment in bonds backed by the US government.
When everyone is jumping on the band wagon its probably time to run away and passively investing in guilts is dangerous when bank rates return to normal - there will be a massive loss of capital.
OTOH passive investment will only track the market and return an average of 7-10%. Compared to that small-time landlording (which I define as 1-10 units), a popular side-income stream for many working professionals, returns 10-20% in return for higher risk and volatility (you could get bad tenants or have units go vacant).
Also since passive investment requires "no skill and little luck" it's one of the few entry routes into the capital-owning class available to working-class people and middle-class professionals. Anyone can buy an ETF for a couple hundred dollars. You don't need a hot stock tip or a insider lead on an undervalued property. So I'm not sure why one would want to start treating unearned income exactly the same as earned income at the precise point in history that we've learned about the magic of passive investment.
Its not fraking "income" for gods sake if you don't know the difference between income and capital gain you probably should learn it before commenting on this issue.
"Unearned income includes investment-type income such as taxable interest, ordinary dividends, and capital gain distributions."[1]
"Unearned income includes things like annuity payments, pension income, distributions from retirement accounts, capital gains, interest income, dividends, passive income generated from rental real estate, alimony, stock dividends, and bond interest." [2]
Sorry...is that what you meant? Or were you referring to the definition of earned income?
Trouble is "unearned income" is one of those dog whistle worlds like "rent seekers" - which tends to lead to rants about "the gold standard" and onwards to well we all know where that ends.
If you lose a job, you just lose the income stream and 2 weeks of salary at most (+ whatever time it takes to find a new job). With an investment there's a risk of losing the asset entirely. Rental property gets buried in a landslide, company goes bankrupt, gold gets stolen etc. There's also the risk of not making any return at all: rental property remains vacant, company barely breaks even, gold only tracks inflation etc.
> investment in bonds backed by the US government.
Those bonds have a correspondingly low yield, to reflect their low risk.
For example, the risk of losing an earned income stream because my (assumed honest) employer (fires me, goes bankrupt, etc.) seems much higher than the risk of losing an unearned income stream based on my investment in bonds backed by the US government.