Do taxes incarcerate our children in the urban killing fields?

Emeritus Archbishop Tutu and Reverend Mpho Tutu warn of the dangerous and degrading township areas.

 

In their anguished appeal for unity in securing the safety of township children Emeritus Archbishop Tutu and Reverend Mpho Tutu suggested that those who live in these dangerous and degrading areas are in fact incarcerated, unable to escape:- “they are all victims of the environments in which these communities are forcedto subsist.”

Perhaps urbanisation is a popular trend, even unstoppable, but there is not one shred of evidence that it is voluntary. For who would freely choose to live in a 10m² hell-hole in the middle of killing fields if they could afford 10 000m² of arable land in the country, a whole rugby pitch. The developers of modern rural villages offer private schools and clinics Wi-Fi and a life-style of hunting, fishing, and horse riding with cricket on Wednesdays and lots of safe spaces for kids to do things like getting muddy, catapulting birds and building tree houses.

First and foremost though, raw land offers a wide and lucrative range of self-employment.

Working an hour or two a day on 500m², within the five yard line area of a rugby pitch, anyone can grow three tons of food a year, enough for a family of four and worth some R2500pm at supermarket prices.

For the earth is unfathomably fecund; a tiny seed will grow to a pumpkin too large for a one-ton bakkie. A banyan (fig) tree has a crown which can extend to one and a half rugby pitches. In one year a pair of rabbits will spark the birth of eight hundred and forty very close relatives worth R145 each. And the clip of twenty mohair goats fetches R36000pa.

In three years a four bedroomed mansion and champagne vineyard and cellar can be hand-built out of the soils, rocks, grasses and timber of the land plus the housing subsidy. All these low-input products and luxuries, have been grown, reared and made in the countryside for over two millennia and need no burdensome capital input. Just some sweat, a snip of land and simple tools. They also use one tenth of the carbon which agri-business burns.

This is the classic leisured country life-style of ‘wealth’ villages where developers sell riches beyond people’s dreams, even to the illiterate and indigent.

This is anyway what happened in the Macanga District, Mozambique according to journalist Douglas Roberts. There Universal Africa, a USA leaf tobacco trader “transformed a desperately poor, war-torn part of the country into rich farmland by training more than forty thousand black Mozambicans to grow tobacco and other crops for export. Peasants who had recently lived in mud huts, dependent on food hand outs from the West, were building houses, driving four-by-fours and sending their children to school”

There is one caveat to this wealthy and dignified life-style. The entry cost for vacant land must become an affordable monthly levy, a rates and taxes surcharge, replacing all income taxes and vat. So instead of paying ±R60 000 per hectare for a small-holding it will cost R330pm, at a p/e ratio of fifteen years.

South Africa has a rich history of public revenues which depended on unearned land revenues. It goes back to Governor Craddock’s perpetual quitrent tenures of the early 1800s. Ironically those affordable lands attracted the UK’s poor and landless to the Cape colony in droves. Rates and taxes were levied on sites only until 2004. Similar tenures are currently being marketed in Zambia where hundreds of thousands of unused hectares are becoming available. They are expected to attract landless South African and Zimbabwean farmers.

The tragic, unnecessary, high and unearned land prices in South Africa commenced when Governor Craddock later allowed settlers to convert their quitrent titles into freeholds. They had to pay fifteen years of rates in advance. In spite of the fact that the earth still has billions of years of economic life, according to MIT scientists. If land revenues in 1994 had been targeted for public funds, not personal taxes, then average urban land prices would never have risen fourteen times to R550 000 currently, more for smallholdings and four times faster than CPI.

And the real outrage is that land prices depend not on human endeavour or capital, but ultimately, to the extent that the Treasury targets personal taxes on citizen’s work, profits and spending NOT land revenues.

The Tutu’s know full well that citizens must render unto Caesar (only) what belongs to Caesar. If land is to be affordable and children safe that means Treasury needs to simply capture those revenues which others would be willing to pay to prevent others from using their land, not their work, savings or consumption.

So, in the end, it is the tax system which determines whether people can afford to escape their incarceration.

14 April 2014 by Peter Meakin

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