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Passive income from investments can be taxed at a lower rate from "summary" of Tax-free Wealth by Tom Wheelwright
Passive income from investments is a powerful way to build wealth because it is often taxed at a lower rate than earned income. This is due to the favorable tax treatment that the government provides for investment income. When you earn money from investments, such as dividends, capital gains, or rental income, you may be subject to capital gains tax or qualified dividend tax rates, which are generally lower than ordinary income tax rates. For example, long-term capital gains and qualified dividends are typically taxed at a maximum rate of 20%, compared to the higher marginal tax rates tha...
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