What is the difference between nobles and merchants the idea is that merchants only sit around doing nothing making money of others work but isint that basically the same thing nobles do except they make it law that the people under them a half to pay taxes that the nobles use to buy pointless things like dresses

As with most questions of class, it comes down to questions of ideology and and power. 

Ideologically, the ideals of the nobility and of the merchant class were entirely opposite: noblemen were supposed to be open-handed (especially since their power originated from them acting as “ring-givers” to armed men), ostentatiously luxurious (so as to display their glory and magnificence that set them apart from the common herd) and pleasure-seeking, bold and reckless in pursuit of fame and glory; merchants were supposed to be thrifty, sober, and prudent. 

The nobleman saw in the merchant a coward who would debase himself (and debase others) for mere profit, and who valued his skin more than his honor; the merchant saw the nobleman as a hypocritical parasite who despised anyone who worked for a living and exalted his own idleness, while excusing mindless debauchery and bloodshed by appeal to obsolete virtues. 

But as a Marxist historian would argue, there is always the means of production. The power of the nobility was in landed wealth and their rights to extract labor and taxes from those who dwelt on their land. The power of the merchant was in capital, and thus to a feudal mindset represented that terrifying impossibility: wealth not based on land and feudal tenure, notional, imaginary wealth that could fly through the air invisible like spirits and reshape entire economies, and somehow turn a peasant into a magnate richer than any nobleman, threatening the social hierarchy. 

And to a merchant, the medieval order itself was the dead hand of the past, the obstacle to all progress. As Polayni notes, capitalism requires free markets in land, labor, and money – feudalism had frozen land into an unbreakable chain of agreements between lords and vassals; serfdom had chained men to their land and their ancestral occupations; faith had deemed lending money at interest to be a mortal sin.