Quote:
Originally Posted by crucifissio
yes absolutely, he would be spending 500K on building material and services etc...this is a scenario where he actually builds something, this is great you will get no dispute from me...
on the other hand when he buys something already built, and new houses are a small fraction of total house buys, the situation is completely different...he will borrow 500K from the bank and return 500K to the bank...
also rich people have only a small fraction of their wealth in houses and most in stocks and these are "protected" either offshore in tax havens or by means of loop holes in the law because they can afford lawyers and advisors etc...
even if the money was not protected, and taxed, very little would trickle down...bill gates money will trickle down but the vast majority will keep their cash working for them, offshore...
you would do the same...so would I...
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1. they are only "protected" from further taxation...
lets say I'm a house builder, does it make any difference at all where I get the $500k from? (that I will use to buy materials and hire people) It's completely irrelevant if the new owner pays for it directly... through some corporation or through some offshore scheme... I still get my $500k and I still hire the same people and still build the same exact house...
2. it doesn't really matter that much if the house is new or used either... I sell a pre-existing $500k house, now I'm the one with $500k to spend, and what's kinda odd... I can take this $500k, borrow the typical 80% ($2M) and now I have $2.5M to stimulate the economy with...
3. investing in "stocks" is not much different than investing in real estate, names are different but the outcome is the same... you buy stocks of some startup (like many investors do), Google lets say, and as a result of your investment wealth gets created, 10s of thousands of people get hired, and as a result world is a better place? sounds like a pretty positive outcome? certainly better than a less sophisticated person buying some useless widget from china that he will throw away 3 months later?
4. money doesn't just "work", it "works" when it's invested... which involves transferring the $$ from the "investor" to the "entrepreneur"... which he uses to expand his business, hire people, etc...