How about people with only UNEARNED income from interest and investments who paid in $15000+ in federal Tax??

My wife and I worked for 40+ yrs, paid max social security, saved into 401K, co stock plan, invested in mutual funds, annuities, etc. We are now retired and live on these savings, company pension and social security. It really ticks me off to hear the income we have is UNEARNED. If it is UNEARNED why are we in the 25% tax bracket and pay through the nose???

I agree that this seems to fall under "double taxation", but you are not paying taxes on you initial (taxed) investment, ONLY on interest and dividends that you received FROM the investments. It is STILL income, it is just a different sort of income. Why should this not be taxed? It is still money that you are receiving that was not previously taxed, and therefore, income. People have to pay taxes on social security earnings, and we pay taxes on the profits of a rental house we own.

If you are in a 25% tax bracket, that is not so bad. My husband earned $60K last year, we have 2 kids, and STILL ended up paying almost 30%, with the rental income. We are hardly raking in the dough, and we have bills like everyone else. We are in one of the worst tax brackets for families, because we don't earn enough to have lots of loopholes, yet we do earn enough not to get any breaks. (We also had close to 4K in unreimbursed medical expenses and we donated another 5K to charity this year in cash, furniture and clothing, and STILL didn't get any breaks.)

Unearned income is better in many ways, because you do not have any expenses to earn it. (Gas, dry cleaning bills, car maintenance, lunches out, etc) that are a part of the working world. And, if you live past the age of 74, you have officially received every dime you paid in back, with government services you have utilized (police, schools, roads, etc), social security and medicare. So, just be sure to live long enough to get it all back!

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Individuals who pay income taxes would get up to $600, working couples $1,200 and those with children an additional $300 per child under the agreement. Workers who make at least $3,000 but don鈥檛 pay taxes would get $300 rebates.

The first rebate payments could begin going out in May, and most people could have them by July, though the IRS will already be overwhelmed processing 2007 tax returns.

The rebate is not taxable at the federal level, and it's unlikely the states would tax it, though that's not entirely clear at this point.

Unearned means the income was not generated from wages for work performed in the current tax year.