Whites already pay wealth tax

Kallie Kriel

Kallie Kriel says Archbishop Tutu should acknowledge their contribution to the welfare of SA

Archbishop Emeritus Desmond Tutu’s suggestion that whites should pay wealth tax is just as senseless as suggesting that a soccer ball should be round – while everybody already knows a soccer ball is round and will probably remain round for a long time. The point is that “whites” – to use the racial term from Tutu’s suggestion – already carry an exorbitantly heavy load which may be regarded as various forms of “wealth tax”.

Although the available statistics from the South African Revenue Service (SARS) do not include any information regarding race groups’ contributions, the reasonable assumption can be made from other data on income groups that white people are responsible for more than half of all personal income tax which the government currently collect.

South Africa’s total population of 50 million people are currently supported by roughly only 5,2 million people who pay personal income tax. Approximately 31% of these tax payers, or 1,6 million people were responsible during the 2009/2010 tax year for paying 81,2% of all income tax.

The small tax basis leads to South Africa’s relatively small middle class, of which a significant part is white, currently being overtaxed to support the country. To try and use “wealth tax” to squeeze another golden egg from this goose is not sustainable. The punch-drunk goose will not be able to optimally contribute to further economic growth, to the detriment of everyone in the country.

Those who regularly accuse white people that they do not contribute to the welfare of their fellow countrymen, deliberately ignore the amount of tax money from this group which the government uses to fund social spending. Currently, a total of 15,1 million in social grants are paid monthly by the government. In the 2011/2012 tax year, approximately R97,6 billion were budgeted to spend on these grants. Furthermore, an additional R49,3 billion were budgeted to spend on other forms of social support; as well as R112,6 billion on public health, R121,9 billion on housing and community infrastructure and R189,5 billion on public education.

Altogether, this constitutes roughly 59% of the government’s total budget. The large amounts of money which the government spend should have a much larger impact than it currently has. However, tax payers and the impoverished merely have to look on as a lot of this money is squandered through mismanagement and corruption.

Poor service delivery by the government also leads to more pressure on this small group of tax payers in the country. The group now pays “double tax” in many instances since they are necessitated to turn to private service providers to obtain quality medical care and security services. Additional school fees are paid to ensure high quality education for their children. The impact of VAT, municipal tax, fuel levies, vehicle licences, toll fees, import tax, tax on property transfers, capital gains tax and a range of other taxes such as the proposed national health insurance system are not even mentioned. 

A case study done by Solidarity’s Research Institute, found that, under normal circumstances, an individual who earns R30 000 per month pay approximately half of his/her income on, among others, income tax, VAT, fuel levies, toll fees, property tax, medical expenses and security services. An average member of the group can thus work for 6 months of the year to pay tax and expenses which normally should be covered by tax. The time spent working to pay tax is in effect also time spent in which people work to fund the government’s expenses in aid of the poor.

To work and pay tax without being able to benefit from a large portion thereof is probably one of the biggest reconciliation gestures anyone can make. Merely dismissing overtaxed whites’ significant contribution to the treasury plays into the hands of political ideologists who would like to maintain the myth that white people are oppressors who make no contribution to the welfare of their fellow countrymen. This myth is abused as a justification to commit new injustices. The fact that Julius Malema is allowed to say that whites are criminals without President Zuma calling him to order, is an alarming example of the twisted thought framework that takes advantage of this myth.

The facts prove that white people do more than their share in this country. We can no longer remain quiet when attempts are made to dismiss this group’s role, create false feelings of guilt and making them the punch bag of society.

I want to conclude with a message to Archbishop Tutu: The position which you fill as moral voice in the ears of a large portion of the country’s population, demands of you – while you now speak in racial terms – to start putting a stop to the criminalisation of whites by the Malemas of this world. A good start will be to acknowledge the significant contribution which whites make to the treasury and the country

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