In your editorial you asserted that the ANC-EFF’s expropriation of land without compensation is a major disaster (A desperate, terrible, horrible land mistake, March 5). However, you forget that the only reason land has any capital value is because the state fails to capture SA’s unimproved and unearned R1-trillion land rents. Instead it relies on the South African Revenue Service for the jaw-dropping expropriation without compensation of a portion of the hard-fought fruits of citizens’ work and wealth through income taxes and VAT. Being economically elastic, these taxes lower GDP by about R1-trillion annually — that’s 25%. Being inelastic, land differs from labour and capital as it is neither produced nor reproducible, so its supply is fixed. It does not easily wear out, depreciate, spoil or obsolesce. It is permanent and immobile. It is priced at a p:e of 15 to 20 years of rent. The market value of land relies entirely on the state subsidy of land prices, since there is nothing la...
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