LETTER: Higher tax for the super-rich does not have to stifle growth

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The extra revenue could be used to finance tax cuts lower down the line

In many countries, super-rich individuals pay tax at a far higher rate than the 45% the super-rich individual pays in SA .

Consequently, one wonders how John Johnston can be certain the economy is going to suffer if people who earn more than, say, R3m a year are forced to start paying tax at a slightly higher rate than those who earn more than R1,577,301 a year, the point at which the maximum rate is introduced in SA? . Similarly, people who earn more than, say, R5m a year could begin to pay at a slightly higher rate than those who earn more than R3m, and so on.

The extra revenue from this could be used to finance tax cuts lower down the line, which is bound to appeal to those who avoid getting sucked in by the theory that super-rich individuals in the executive are better at creating jobs and taxable income than the rest of us. Perhaps Johnston had someone else in mind when he wrote his letter?

Unfortunately, politicians need to repay the super-rich for their campaign contributions and hence are likely to be hostile to the suggestion that we experiment a little. Hats off to Corruption Watch for pressurising President Cyril Ramaphosa into setting an implementation date for the Political Party Funding Act.JOIN THE DISCUSSION: Send us an e-mail with your comments. Letters of more than 300 words will be edited for length.

 

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