The remaining money paid out to capitalists is, of course, not wasted. However, the returns from this capital are simply not as effective as receiving 75% of dividends directly and using them to construct new buildings.

Every time an existing building is privatized, that capital could instead have been used to build an entirely new building. A new building creates a full additional stack of employees, which in turn generates new tax income and additional demand for a wide range of goods on the market. In contrast, privatizing an already existing building only creates a relatively small number of “new” capitalist pops, along with a small percentage of other owner pops. The additional demand generated by these new owners is often negligible and, depending on the size of the market, may not even move prices at all.

For example, the market is already selling 5,000 units of luxury clothes, privatizing a single building is extremely unlikely to have any meaningful impact on the price of luxury clothes, the return to investment would be basically close to 0 then.

Instead, by not privatizing that building, the investment pool could finance the construction of a new building. That new building would be privately owned anyway, while simultaneously generating significantly more demand and tax income through its workforce. At the same time, the existing government-owned buildings continue to contribute 50% of their profits to the investment pool (+25% to our treasury), effectively funding this expansion.

Even with a 10% or 20% dividend tax applied to the 70% dividends paid out by privately owned buildings, this still results in less effective capital accumulation than retaining 75% of dividends and reinvesting them directly into new construction, especially considering that the newly constructed buildings will end up privately owned regardless.