# Profits are a tax on labor **URL:** \ **Category:** Great Debates\ **Created:** [July 12, 2013, 3:07am UTC](https://boards.straightdope.com/t/profits-are-a-tax-on-labor/663283 "2013-07-12T03:07:25Z")\ **Posts on this page:** 10\ **Page:** 26
**Author:** ![MrQwertyasd](https://avatars.discourse-cdn.com/v4/letter/m/9d8465/32.png) [@MrQwertyasd](https://boards.straightdope.com/u/MrQwertyasd)\ **Post date:** [August 12, 2013, 10:29pm UTC](https://boards.straightdope.com/t/profits-are-a-tax-on-labor/663283/501 "2013-08-12T22:29:48Z")
This one is easy. Look in dictionary under government, find that synonym is management. Look in dictionary under manager, find that it is synonym for governer. Government, management, same difference, profits are a tax. ---
**Author:** ![pancakes3](https://avatars.discourse-cdn.com/v4/letter/p/ba9def/32.png) [@pancakes3](https://boards.straightdope.com/u/pancakes3)\ **Post date:** [August 12, 2013, 11:12pm UTC](https://boards.straightdope.com/t/profits-are-a-tax-on-labor/663283/502 "2013-08-12T23:12:39Z")
> [@SlackerInc](#): > > It’s not only for justice or even primarily for justice. That was really more of an illustration that there is no reasonable way to ascribe private ownership to land. It is intrinsically a proposition just as bizarre and wrongheaded as owning sections of the atmosphere, except that we have become used to it. I feel like the current method that involves zero rape and minimal pillaging to be quite fair. If the Europeans had adhered to modern customs of purchasing land at a fair price rather than violent annexation, it would have resulted much more civil settlement of the Americas. The idea of land ownership is obvious - even beyond humans, into the animal kingdom. I don’t find it arbitrary, bizarre, or wrongheaded at all. > [@MrQwertyasd](#): > > This one is easy. > Look in dictionary under government, find that synonym is management. > Look in dictionary under manager, find that it is synonym for governer. > Government, management, same difference, profits are a tax. Even if what you said was true, if it was that obvious, wouldn’t the synonym of profits just be tax and cut out the middlemen? ---
**Author:** ![Mijin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mijin/32/9369_2.png) [@Mijin](https://boards.straightdope.com/u/Mijin)\ **Post date:** [August 13, 2013, 2:16am UTC](https://boards.straightdope.com/t/profits-are-a-tax-on-labor/663283/503 "2013-08-13T02:16:44Z")
> [@SlackerInc](#): > > Bwahahahaha…you are hilarious! I’m not actually interested in US history, I just included that line because it’s a primarily American forum. Scratch it. My actual point though, I stand by, which is that the vast majority of people with property either bought it themselves, or have a recent relative that did. The scenario of land being seized and then it’s passed down through the generations to the modern day is highly unlikely in the real world, but common in discussions like this. ---
**Author:** ![QuickSilver](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quicksilver/32/7832_2.png) [@QuickSilver](https://boards.straightdope.com/u/QuickSilver)\ **Post date:** [August 13, 2013, 11:55am UTC](https://boards.straightdope.com/t/profits-are-a-tax-on-labor/663283/504 "2013-08-13T11:55:10Z")
> [@Trinopus](#): > > Amazing, innit? (But…ah…which way, exactly, are you rejecting it? What’s your viewpoint here? No matter how obvious it may be, someone here is gonna disagree with it.) My position is that abolishing all forms of ownership because of centuries old wars of conquest is a naive and foolish proposition. It’s ridiculous to suggest that because injustices were commited in the distant past we should proceed to dismantle the economy and commit more injustices by taking away people’s property. ---
**Author:** ![Human\_Action](https://avatars.discourse-cdn.com/v4/letter/h/ac91a4/32.png) [@Human\_Action](https://boards.straightdope.com/u/Human_Action)\ **Post date:** [August 13, 2013, 12:00pm UTC](https://boards.straightdope.com/t/profits-are-a-tax-on-labor/663283/505 "2013-08-13T12:00:16Z")
> [@SlackerInc](#): > > I am not saying, just to be clear, that we can or should dig back into time and sort all of this out plot by plot. What I am saying is that the entire concept of private land ownership should be scrapped. That does nothing to solve this supposed injustice. Governments were in the conquest business too, and passed the land forward to subsequent governments just as individuals do. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [August 13, 2013, 7:16pm UTC](https://boards.straightdope.com/t/profits-are-a-tax-on-labor/663283/506 "2013-08-13T19:16:47Z")
> [@emacknight](#): > > Good, you’ve come a long way. Now you just need to realize that providing capital is a service. I _rented_ $140k from someone so that I could _own_ my house. I am very appreciative of that, so I am willing to pay 4% per year. The person renting me that money profits, and I’m okay with that because I benefit. That person may actually be doing more “work” than the kid that rented me a surfboard. The two services are the same, and both generate profit. > > Keep in mind that if the person renting me money wanted 8% I would have kept renting an apartment instead, in which case he’d make zero profit. What that means is that the two of us have to come to an agreement, by which he gets profit, and I get a house. There’s a good, practical reason for profits: if you can’t make money from letting people use your stuff, you’ve got no reason to let people use your stuff. So if you’ve got a rake, or some land, or some money, or a surfboard, or whatever, why would you let someone else use it, if you don’t get paid? You wouldn’t. I wouldn’t. Nobody would. So there you go: a good, practical reason for profits. You’ve identified it, I’ve identified, it’s been identified over and over again. Which is why I asked about the \*moral \*justification for profit to begin with - because I already understand the practical justification: because some people have stuff, and other people don’t. > [@](#): > > What you’ve done is tried to demonize the person that rents cash, while making the kid that rents me a surfboard a hero. It’s entirely possible that kid stole the boards and doesn’t pay any taxes, but for some reason you view that as “earned income” worthy of our respect. > > Okay, now realize that owning things is actually a lot of work (look up depreciation). Then realize that what you’re describing is what most people call retirement, but you’re probably okay with that. On a side note, you’d be a lot happier if you stopped worrying about how other people live. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [August 13, 2013, 7:25pm UTC](https://boards.straightdope.com/t/profits-are-a-tax-on-labor/663283/507 "2013-08-13T19:25:54Z")
> [@emacknight](#): > > Good, you’ve come a long way. Now you just need to realize that providing capital is a service. I _rented_ $140k from someone so that I could _own_ my house. I am very appreciative of that, so I am willing to pay 4% per year. The person renting me that money profits, and I’m okay with that because I benefit. That person may actually be doing more “work” than the kid that rented me a surfboard. The two services are the same, and both generate profit. > > Keep in mind that if the person renting me money wanted 8% I would have kept renting an apartment instead, in which case he’d make zero profit. What that means is that the two of us have to come to an agreement, by which he gets profit, and I get a house. There’s a good, practical reason for profits: if you can’t make money from letting people use your stuff, you’ve got no reason to let people use your stuff. So if you’ve got a rake, or some land, or some money, or a surfboard, or whatever, why would you let someone else use it, if you don’t get paid? You wouldn’t. I wouldn’t. Nobody would. So there you go: a good, practical reason for profits. You’ve identified it, I’ve identified, it’s been identified over and over again. Which is why I asked about the \*moral \*justification for profit to begin with. Because I already understand the practical reason: because some people have stuff, and other people don’t. > [@](#): > > What you’ve done is tried to demonize the person that rents cash, while making the kid that rents me a surfboard a hero. It’s entirely possible that kid stole the boards and doesn’t pay any taxes, but for some reason you view that as “earned income” worthy of our respect. The reason I view income earned from work as “earned income” is because that’s the definition of “earned income”. It’s the opposite of “unearned income”, which is income from sources other than work. I haven’t tried to demonize anybody. If you feel like earned income is better than the unearned kind, that’s your deal, not mine. I prefer the unearned kind, personally. > [@](#): > > Okay, now realize that owning things is actually a lot of work (look up depreciation). Then realize that what you’re describing is what most people call retirement, but you’re probably okay with that. On a side note, you’d be a lot happier if you stopped worrying about how other people live. You should look up depreciation: if you do, you’ll see it has nothing to do with work. ---
**Author:** ![emacknight](https://avatars.discourse-cdn.com/v4/letter/e/3ec8ea/32.png) [@emacknight](https://boards.straightdope.com/u/emacknight)\ **Post date:** [August 13, 2013, 9:22pm UTC](https://boards.straightdope.com/t/profits-are-a-tax-on-labor/663283/508 "2013-08-13T21:22:11Z")
> [@LinusK](#): > > Which is why I asked about the \*moral \*justification for profit to begin with. Because I already understand the practical reason: because some people have stuff, and other people don’t. The moral and the practical really aren’t that far apart. From the surf board example: I really like surfing, and am very happy that someone will rent me a board when I’m on vacation. That service is worth a lot to me, in fact it’s worth far more than the going rate for surf board rentals. So I’m going to turn this around on you again. From my perspective as the renter, what is my _moral_ obligation? I’m actually willing to pay a lot more, but I don’t, I pay the asking rate. You seem to view profit as only the cash portion, but I think I profited from that transaction since I feel like I got more enjoyment than I had to pay for. Imagine you went to a garage sale, and say something for a dollar that you knew was worth $20. What is your _moral_ obligation? Do you pay the asking price, or what you think the real value is? The seller might think it’s junk, and view $1 as pure profit. If you turn around and sell it for $20 you made $19 profit. How can you both profit? There lesson here is that in a voluntary transaction there is no such thing as profit in the way you describe. The owner of the surfboard can only charge me as much as I’m willing to pay. And if I’m not willing to pay enough, no one is going to provide me with a board. > [@LinusK](#): > > The reason I view income earned from work as “earned income” is because that’s the definition of “earned income”. It’s the opposite of “unearned income”, which is income from sources other than work. What you’re doing is taking the legal definition the IRS uses, and then mixing it with the general use of the word. In common everyday language the term _unearned_ makes people think of lazy, or undeserving, or unwarranted. So it’s hard to find a _moral_ justification for something that’s _unearned_. But the IRS didn’t need to separate capital gains from ordinary income, any more than they needed to define a tomato as a vegetable instead of a fruit. A tax form is full of stupid definitions because that gets politicians elected. And what you probably didn’t realize is that short term capital gains are taxes at your normal rate, which would suggest that short term capital gains are earned income, while long term capital gains aren’t. Dividends also have a bunch of stupid rules like that. Here’s another weird example to consider. You could be hired to manage a pension fund, in which case your salary would be considered earned income. But if you managed your own investments, the gains you made would be considered unearned income. What’s the difference? > [@LinusK](#): > > You should look up depreciation: if you do, you’ll see it has nothing to do with work. I’m going to go make some repairs on my surfboard, otherwise I wouldn’t be able to rent it. Think about that for a minute while I go do _work_. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [August 14, 2013, 9:29am UTC](https://boards.straightdope.com/t/profits-are-a-tax-on-labor/663283/509 "2013-08-14T09:29:37Z")
> [@emacknight](#): > > So then taxes are a tax on profits, which means taxes are a tax on labour!!! You think you’ve said something new here, but you’re not listening. Taxes are a tax on something, certainly: usually on productivity, in the present model, but it could be on real estate. Profits are the same. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [August 15, 2013, 5:06pm UTC](https://boards.straightdope.com/t/profits-are-a-tax-on-labor/663283/510 "2013-08-15T17:06:03Z")
> [@emacknight](#): > > The moral and the practical really aren’t that far apart. From the surf board example: I really like surfing, and am very happy that someone will rent me a board when I’m on vacation. That service is worth a lot to me, in fact it’s worth far more than the going rate for surf board rentals. > > So I’m going to turn this around on you again. From my perspective as the renter, what is my _moral_ obligation? I’m actually willing to pay a lot more, but I don’t, I pay the asking rate. You seem to view profit as only the cash portion, but I think I profited from that transaction since I feel like I got more enjoyment than I had to pay for. > > Imagine you went to a garage sale, and say something for a dollar that you knew was worth $20. What is your _moral_ obligation? Do you pay the asking price, or what you think the real value is? The seller might think it’s junk, and view $1 as pure profit. If you turn around and sell it for $20 you made $19 profit. How can you both profit? > > There lesson here is that in a voluntary transaction there is no such thing as profit in the way you describe. The owner of the surfboard can only charge me as much as I’m willing to pay. And if I’m not willing to pay enough, no one is going to provide me with a board. > > What you’re doing is taking the legal definition the IRS uses, and then mixing it with the general use of the word. In common everyday language the term _unearned_ makes people think of lazy, or undeserving, or unwarranted. So it’s hard to find a _moral_ justification for something that’s _unearned_. > > But the IRS didn’t need to separate capital gains from ordinary income, any more than they needed to define a tomato as a vegetable instead of a fruit. A tax form is full of stupid definitions because that gets politicians elected. And what you probably didn’t realize is that short term capital gains are taxes at your normal rate, which would suggest that short term capital gains are earned income, while long term capital gains aren’t. Dividends also have a bunch of stupid rules like that. > > Here’s another weird example to consider. You could be hired to manage a pension fund, in which case your salary would be considered earned income. But if you managed your own investments, the gains you made would be considered unearned income. What’s the difference? > > I’m going to go make some repairs on my surfboard, otherwise I wouldn’t be able to rent it. Think about that for a minute while I go do _work_. Your surfboard’s broken? Maybe owning it will fix it up. It sounds like you’re rejecting the notion that there’s a difference between earned and unearned income. That’s fine, I guess. I mean, anything to win an argument, right? (Hint: the difference is the difference between having a broken surfboard, and having one that’s… not.) I promise you, though, if you have a job, you’ll learn the difference. In the meantime, I’d be pleased to work for you. The reason it’s called unearned income is it’s not for _doing_ something, it’s for _being_ someone. Anyway, I’m not a tax code expert, but I will say that, generally, if you actively manage your own business, the tax code requires you to pay yourself a salary, and calls it “earned income”. (Of course, you’ll probably pay yourself as little as possible, because earned income is taxed at a higher rate.) But what difference does it make? The tax code is just a bunch of stupid nonsense, anyway… Right? [Previous page](https://boards.straightdope.com/t/profits-are-a-tax-on-labor/663283.md?page=25)