capitalincome

Capital income, or income from capital, refers to earnings derived from the ownership of capital assets rather than from labor. It includes interest received on bonds and bank deposits, dividends from shares, rents from property, royalties from intellectual property, and capital gains realized on the sale of assets. In some national accounts, imputed rent is counted as a form of capital income for owner-occupied housing, though treatment varies across systems. By contrast, income from work is classified as labor income.

Capital income is often volatile and can be a major component of total income for savers and investors. It influences saving behavior, consumption decisions, and asset prices, and it plays a key role in macroeconomic analyses of inequality and growth. Measuring capital income can be complex due to taxes, inflation, and the treatment of unrealized gains or imputed income.

Tax policy and capital income are a common focus in public finance debates. Jurisdictions may tax capital income at preferential rates, impose capital gains taxes, or rely on wealth or estate taxes that affect the after-tax distribution of income. Policy discussions frequently address equity, efficiency, avoidance, and the impact of capital income taxation on incentives to save and invest, as well as on overall economic growth and income distribution.

See also concepts such as net capital income, after-tax income, and real versus nominal income, which are used in analyses of taxation, finance, and inequality.