LETTER: Progressive tax trumps expropriation
Globally developed way of taking assets from citizens conforms to the rule of law
Jabu Ntuli’s letter on expropriation without compensation essentially endorses the destruction of the rule of law (“Land silver lining”, February 10). If we go this route we can forget about investment and growth.
If we believe in the rule of law there is a way, developed globally over the past century or longer, to take assets from citizens. It is called progressive taxation. Taxation, which falls far more heavily on the richer members of society in SA, collects much more than R1-trillion annually. This money can be used in any way the government sees fit.
Should the government decide to capitalise the disadvantaged via grants or loans, this can be done via the tax system. Every rand expropriated outside the tax system will damage the economy and cause an erosion of tax revenue many times greater.
Tax is gathered not only in the form of VAT and income taxes, but also comprises various forms of wealth tax on the rich. There is a vehement worldwide debate on better forms of wealth tax to reduce inequality, but no country proposes merely seizing assets.