In the column, "No cash for stimulus, but words will help" (September 3), there is little explanation for the disagreement with the Davis tax committee’s findings on a wealth tax and immovable property The committee’s report explains: "Hence a land tax may not deter production or distort the market mechanism or otherwise create a deadweight loss." Our dead-weight losses are the reason why there is no room for stimuli. The committee did not reveal the quantum of SA’s deadweight burden, but it is a standard international measurement. In his submission to the committee, Prof Nicolaus Tideman calculated that SA is likely to incur a R0.8-trillion loss of GDP in 2018-19. The ratio of taxes to loss of GDP is therefore 1:0.8. Imagine that prior to the introduction of income taxes and VAT in 1914 a pair of shoes cost R10. In 1914 terms the same shoes will cost about R12.80 in 2018, where the tax rate is 28% of GDP. If SA had continued with its land tax regime the shoes would still cost R10 b...
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