LETTER: Wealth tax and more welfare won’t fix SA

It is good that the Treasury is not embracing a basic income grant (BIG), as it is simply unaffordable (“Treasury says state not looking at basic income grant,” November 11). But it is highly worrying that a wealth tax is even a part of the conversation.

SA taxpayers are already overburdened. We’re taxed on our incomes, our imports, our fuel, our products, our dividends, when we die, when we inherit, when we have a business, and more.

Pundits who call for taxing the wealthy don’t really understand SA’s tax system. The rich already pay more tax. That’s how percentages work. Above that, higher-income earners have to pay a higher percentage of their income to fund a government that spends the money wastefully and badly. And how unfair is it that those who pay tax are most often those who don’t benefit from it?

It is good that the Treasury is understanding that a BIG is a bad idea and is completely unaffordable and unworkable. The idea of a BIG is also just ludicrous. Rather reinforce the effectiveness of existing grants for those who deserve the money, rather than giving a minuscule amount to every South African — if they need it or not.

Rather than increasing tax or formulating new grants, the government needs to liberalise the economy. Weaken labour regulations, abolish BEE and make it easier to conduct business. This will lead to more jobs and more wealth, which will not only raise tax revenue but additionally make a BIG unnecessary. That’s what will fix SA. Not a wealth tax. Not more welfare. Just sound economics.

Nicholas Woode-Smith
Cape Town

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