Income is income, tax it all the same.

[customerserviceguy]

83. Generally speaking, I'm fine with that

There are a lot of sorts of compensation that are disguised as something given preferential treatment that should be taxed as regular ordinary wage income, and subjected to FICA and Medicare taxes, as well.

I don't get where you get the idea that Social Security is taxed higher than all investment income (capital gains, perhaps, but not dividends and interest) From the Social Security website ( http://www.ssa.gov/planners/taxes.htm ):

"No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules.

If you:
•file a federal tax return as an "individual" and your combined income* is between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits, more than $34,000, up to 85 percent of your benefits may be taxable.

•file a joint return, and you and your spouse have a combined income* that is ◦between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits, more than $44,000, up to 85 percent of your benefits may be taxable.

That works out to a fifteen percent exclusion of income, minimum, for Social Security benefits. Pension, interest and dividend income, and withdrawals from an IRA or 401K don't get any such exclusion.

When you go fiddling around with capital gains exclusions, are you going to include the gain on principal residences? That's something a lot of retirees have come to depend on, and if they hear "Income is income" they might fear for that tax break.