INEQUALITY
HILARY JOFFE: Wealth tax a silver bullet or lead balloon?
‘You would have to ask whether the government was spending the money raised by a wealth tax in ways that reduced inequality’
A discussion at the Wits School of Governance on Monday on the idea of a wealth tax for SA came in a week interesting for at least two reasons. One was the release by Statistics SA of a report on poverty that shows that income inequality as measured by the Gini coefficient has improved just a fraction, from 0.72 in 2006 to 0.69 in 2011 and 0.68 in 2015. At least it’s not worse, but that doesn’t make it good. At this level, SA remains one of the world’s most unequal societies. And when it comes to wealth inequality, estimates are that the Gini is an extraordinary 0.95 – making SA an almost perfectly unequal society. This was also a week in which it began to be clear just how short of money Finance Minister Malusi Gigaba is likely to find himself as he crafts the October medium-term budget, with indications that revenue collections could fall as much as R50bn short of February’s budget targets. The public purse was already under pressure and now the search for new sources of tax is li...
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