In all of the reading I've done, it has described what paid in capital is and what earned capital is. However, I can't seem to find anything specific about why it is important to keep them separate. My guess it that Paid in Capital is money that is used in the operations of the business and are to some degree already included in the retained earnings. Which is the amount of profitability for the company.

Can you help clarify this for me?

Paid in capital is money invested into the company where earned captil is profits from the operation of the company.

Try to watch the dates of threads dug up. If you're using the similar threads or a search, it will drag up anything a million years old.