Defending Private Property

Dear Sir

During May 2016 Business Day has been upright in defending private property. Both Stephen Meintjes (Land rent suggested as a solution to equitable land distribution, 15th May) and Stephen Power recommend land taxes. (Small window of opportunity for SA to outrun the robots, 30th May) defied the mindless worldwide witch-hunt for hard earned taxes on work and man-made wealth.

It is not clear who devised a tax system where the harder one works and invests, the higher are one’s taxes. But the odds are on Alice.

The alternative capture of unearned land rents by SARS would yield the same R1tr in 2016/17. In doing so it will also put an end to the predatory SARS activity of looking through key holes, whether or not of rogue-unit brothels, casinos and drug runners. Or in pursuing the Machievellian settlement of political scores or the control of Treasury’s purse strings.

Because when public revenue is land-based it becomes independent of the owner’s work or wealth and so visible. The eye can see the benefits of nature, state infrastructure, services, and governance, so tax avoidance or evasion personnnel become redundant.

Assesment disputes are settled by an appeals board which relies on the market evidence of comparable transactions. Where this is sparse the state uses random auction techniques, as in Hong Kong.

Nevertheless Mr Powers enthusiastic support for more comprehensive tax-haven zones inside South Africa, where even land use is tax-free, will put an unrealistic and unjust burden on the rest of South Africa. Unrealistic because taxes will have to rise outside to pay for governance and services inside. Unjust because, as Nobel prize winner Robert Solow, 1987 Nobel Memorial Prize in Economics, put it “every user of land should be required to make an annual payment to government equal to the current rental value of the land that he or she prevents others from using.”


Peter Meakin

private property

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