In this lesson, we'll explore the federal-tax definition of gross income. We'll introduce ourselves to both the economist's definition of income and the legal definition of taxable gross income.

Haig-Simons Economic Income

Economists have long disagreed on precisely how to define income, but many adopt the so-called Haig–Simons definition. Briefly, this definition posits that income equals the sum of an individual's consumption for personal use plus any increase in net worth over a specific...