There’s no such thing as “unearned income” in real life just as there is no free lunch. In order to have investment and/or savings income you’d have had to have earned the money to invest. But this is besides the point.
All this will do is chase money away from traditional investments and ulitmately into offshore investing or the black market.
You are wrong because you are applying a layman's definition instead of using the correct tax definition. Words often have different meanings depending on their application, especially when dealing with laws. We have never taxed dividends, interest, etc. as “earned income” because those items are “investment income”. If Joe Blow works for General Motors and also owns stock in GM, he pays medicare tax on his wages that he receives from GM, but not on the dividends on the stock.
Obama and the democrats are true “tax and spend” liberals, so this should not surprise anyone.