It isn’t bad, it just isn’t particularly noble. Let’s say you are Mr. Gotrocks because you inheirited 100 million dollars from old Grandpa Gotrocks. You invest your money in Fortune 500 companies for 20 years and make 100 million in the process. I believe those Fortune 500 companies would have done just fine even if you hadn’t thrown your money into the mix- your individual shares just weren’t statistically significant to have made an impact on society. On the other hand, if you recognize an up and coming small company and use your wealth to help them emerge in the marketplace, that can be beneficial to society. I’m not saying that capital investment is bad, it is just that some investments are more beneficial to society than others. Speculating in gold futures is another example- if gold goes up you get richer. But exactly how has society benefitted?
I buy a piece of land for 1 million dollars. I hold onto it for 10 years. I sell it for 3 million dollars. I made some money, but I don’t see how that contributed anything to society.
Of course, maybe it’s OK for people to be able to make money without contributing to society, but that’s another question.
I’ll go on the assumption this isn’t a woosh and you are seriously making this statement. How is society benefitted from me making, say, a million dollars in gold futures? Well, in the $200k+ that it takes from me in the form of taxes I’d say. Thats $200k+ that society WOULDN’T have had if I hadn’t of made that investment. Thats $200k that wouldn’t be there for roads, for services, for jobs of civil servants, etc. Only if I mined the gold myself and burried it under a rock somewhere would society not benifit. This doesn’t even take into account the car I buy with my million dollars (someone has to MAKE the car after all, and thus get PAID for the car), the food I buy (again, farmers, grocery stores, clerks, etc), the house I might purchase…or the OTHER companies I will be investing that million dollars in to make MORE money…and thus provide them with capital to hire people.
-XT
Did you buy this land in outer mongolia or in the US? Because in the US when you sell property and make money you have to pay taxes on it. Did you then simply stuff the 3 million in your mattress or did you actually buy anything with it? If you bought goods and services then you contributed to society in the form of inserting capital into the system. That car you bought? It didn’t grow on a tree, people had to make it. That food? Well, it DID grow on a tree, but people had to farm it, package it, sell it. That house? Well, I think you see where this is all going. Ever dollar you make gets taxed. It contributes to society. Every good and service you buy contributes to society. Every stock you buy or investment you make contributes to society.
-XT
I think you are missing the point of the question. The question isn’t if society benefits from my money after I make it, but whether society benefits in the process of me making my money.
So, forget about the taxes and what I might do with the money afterwards. Did the way in which I made the money help society? e.g. if I built a factory and made my money that way, society benefitted as a direct result of me making money, without having to take into account taxes I paid etc.
If you take into account taxes, then *any * legal way of making money helps society, but then the question becomes moot.
If thats the point of the question then I have to ask…who gives a shit? Who cares if society benifits by my MAKING the money if it benifits by my HAVING MADE IT??? That makes zero sense to me. Maybe you can explain why it would be important for society to both benifit while I make my money AND from me making my money?? And why that should be important to any sane individual??
E X A C T L Y! Thats why its such a stupid question asked only by mush headed marxist types. Again, if the question is really turned around you are saying…what the hell difference does it make in the end?? Society DOES benifit by my making the money, reguardless of whether or not it benifits in the making of it. As long as society benifits, who cares?
-XT
You have a good point there, but I would offer the following:
I’m sure society benefitted from Ford’s automobiles (and the way they revolutionized modern society), much more than from any taxes he paid.
Similarly, society has gained much more from Bill Gates due to MS Windows (despite its flaws) making the PC easily accessible to millions of people, than from any taxes he paid.
So, by making your money in a “productive” way, you have the chance to benefit society in a greater way, with the possibility of revolutionizing an industry and even society, improving the quality of life by a quantum leap. On the other hand, by making money in a “non-productive” way, and simply paying taxes, the benefit will not be as much.
In addition, as you may know, many rich people don’t pay that many taxes, so the benefit decreases even more (I heard that Warren Buffett mentioned that he paid less taxes than his secretary, though I’m not sure if this is true or not)
Anyway, I don’t know what the people who posed the original question had in mind, and I don’t think “benefit to society” should be a necessary pre-requisite to any venture, but you have to admit there is a distinction between someone who makes money producing something, compared to someone who makes money by simply buying something and selling it later for a higher price.
And, even illegal ways of making money if you follow IRS rules and report the income on your tax return.
Sure, those folks produced things that benifited society over and above the taxes they paid. But so what? Neither was is ‘right’…they are just different. Unless its your position we are all slaves to society, people do things (like make cars or found software companies) to make money…not to benifit society. If they DO benifit society while ALSO making money for society its just a happy bonus. Both ways benifit society at the core because both ways give society what it asks for…namely a percentage of our hard work in the form of taxes which are use (hopefully) to benifit our nation as a whole.
And again, its a happy occurance when it happens…a twofer for society you might say. But if you go down the path of which is ‘right’ or ‘good’ for society you start getting into shades of ‘goodness’ or ‘rightness’. For instance, I own an IT company. Without going into the details its obvious that I don’t make any earth shaking products, nor provide any vital services to society. Does that mean that the money I make is somehow not as good as the money made by Microsoft or GM? If I’m a broker and I make all my money without employing anyone but simply by trading stocks and bonds or commodities (like your gold example), you are saying I don’t benifit society. However, through my investments I inject fresh capital into our economy, creating jobs. In addition, I handle OTHER peoples money (like, say yours in your 401K or stock portfolio). You see what I’m getting at?
It might happen…but its pretty damn infrequent. By and large the rich pay their taxes. And they pay a VERY large percentage of the total tax collected in the US to boot. I would be considered ‘rich’ by some. I know that I’M paying a hell of a lot in taxes, even with write offs through contributions to charity and such. I have a tax guy that does my taxes each year (I contribute to society even DOING my taxes…you probably do too, and all those who buy stuff like Turbo Tax and such also) and he gets me the best that can be gotten. And my taxes STILL amount to the high 5 figures anually. Something like 35% of my total take home pay. If you have a cite showing that the ‘filthy rich’ AREN’T paying their taxes on any kind of scale I’d be interested in it…cause I’d sure love to know what they know.
There is a distinction, but its really meaningless to me. People make money as they make money. If they pay their taxes, then thats all society can ask of them. If they ALSO benifit society in other ways, then thats just a bonus.
-XT
You are quite wrong in thinking that paying taxes benefits society. This shows a complete lack of understanding how taxation works.
You say: Every dollar you make gets taxed. It contributes to society.
According to this view, the government gains money it would not have had by taxing people. This is incorrect.
Taxation (from the government’s perspective) amounts to little more than a way to balance the books. Stick with me for a second.
The government needs goods and services to function. It could do this without taxing anyone a penny by requiring individuals to contribute an amount of labor for free or stores to contribute an amount of goods. This would be a bad idea, however, since such individuals and businesses would do their best to slack off and avoid payment.
But look what happens when the government pays for goods and services in money: voila! suddenly people are just as eager to work for the government as for anything else.
Again, the government would not have to tax people a penny if it just printed new money to pay for its goods and services. But this too is a bad idea, since it would create hyperinflation, to say the least.
Hence, the government pays for goods and services with money and uses taxation to limit the overall money supply. But this power to tax also gives the government a great deal of power to shape society. It can tax the rich or tax the poor. It can tax smoking so that people smoke less. It can pay subsidies to certain industries (cough ethanol ahem) while soaking others (tobacco and alcohol). Etc. etc.
So, no, the money you pay in taxes does NOT give the government “more money,” except in a very superficial sense. And my point still stands that people can only contribute to society by offering goods and services that actually benefit society.
If I may interject a little here, I’d just like to dispute this assertion (and thus the main assertion of the quetion at hand).
Look at the example you are suggesting a little closer. There is a person who has a piece of property, or a bar of gold, or a certificate for a particular gold future. He is willing to sell it for a particular price. I buy it from him. At some point in the future there is another person who wants that property, bar of gold, or gold future and is willing to pay a higher price than I paid for it in the past. The service I have provided to society is precisely this. I have provided the liquidity necessary for the first person to sell when he needed to and for the second person to buy when he needed to.
Forgetting about taxes for a moment (although xtisme has made excellent points in that regard) and assuming that all the transactions in question were voluntary, I have provided a useful and necessary service to that part of society which participated in those transactions. Furthermore, by participating in a free market I have provided a service to society by which any other members could have participated in similar transactions.
Now let’s look at the other side of the distinction you wish to draw. If I buy raw materials from a person who wishes to sell them, construct some product, and sell the product for more than the combined costs of the raw materials and labor involved, there is no moral difference. Again, forgetting about taxes and assuming voluntary participation in all transactions, the benifits to society are precicely the same as before. Those members of society who participated in the transactions benifited and society at large benifited by the potential provided by a free market.
Finally I’d like to ask anyone who really thinks it is possible to amass a fortune without benifiting society to define his terms. Provide me with a single name of someone who fits this description.
Ever since barter came to an end, yes, that is correct.
Amazingly incorrect. The US Gov’t controls the supply of money through tools such as reserve requirments, treasuries, and interest rates.
Lets make this simple for you.
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I pay my taxes in the form of money.
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The gov’t takes that money and uses it to buy goods and services and whatnot.
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Said goods and services and whatnot benefit society.
What point was that? This seems like a specious statement. What is a good or service which benifits society as opposed to a good or service (which people* want to buy presumably) which does not benifit society.
*people you remember those members of socity. You know, the ones a socity is supposedly formed to benifit in the first place.
Well hell…I’ve seen the light, praise jeezuz! If paying taxes doesn’t benifit society then we should all stop paying taxes!! That would be great for me as I’m paying a hell of a lot of them…and if its for no benifit to society I’d just as soon stop now.
As to the rest of what you wrote…well, if you understand what you are getting at that makes one of us. 
-XT
Far be it from you actually to address the points I raised. And no, you don’t praise Jesus; libertarian market fundamentalists worship something else…
Interesting, but NOT the argument I was making. The specious statement was merely meant to counter the notion that the rich (or whoever) contribute to society merely by paying taxes. They don’t.
And I admitted elsewhere (you know, in this thread) that it’s extremely difficult to tell whether one’s labor is contributing to the good of society or not.
Surely. But what about the point I made: that the government doesn’t NEED to tax ANYONE. It could simply print money to cover its debts. But it does tax the populace because A) if it just printed money hyperinflation would ensue; B) it can control society through taxation.
Wow, you’re just asserting the very points I took pains to argue against. Great! Now let me repeat: taxes are used to balance the federal and state books and redistribute wealth.
And you say that taxes have been in the form of money ever since money replaced barter. But that is not really true. The government can exact labor in other forms and does so regularly: jury duty, miltary service (when there is a draft), requiring citizens to be their own tax accountants, etc.
Here is another example. Two guys. One is a great entrepreneur that makes $1M from the creation of brilliant businesses that really benefit people. The another goes out and wins $1M in gambling. For the sake of argument, they are taxes exactly the same amount. Now the gambler then says, “Hey, I just paid out $500k in taxes–I benefitted society as much as the entrepreneur did!”
Or do we add the “value” they added to society in tax payments to the value they added in their actual work/gambling?
Who did you purchase the land from? Unless it was the tooth fairy, aren’t they a member of society? Your purchase contributed at the moment the deal closed. Not all contributions need be monetary, per the original proposition. And even still, how is land purchase considered “manipulating money”?