Download SACPRIF`S presentation to the Portfolio Committee on Finance

We are an informal Cape Town
based professional think tank
• Presenters
– Brian Amery, Chartered Accountant, MBA
– Peter Meakin, Dip Civil Eng. Professional
Valuer
– Rob Small, Bio-Dynamic Agriculture and Rural
Development Consultant
– Etienne Bruwer, Professional Architect
Objection to the Income Tax
Amendment Act 2009/2010
•Our presentation will show how to meet
your objective of boosting household
confidence by
–Gradually reducing land values to nothing by
replacing Personal Income Taxes with land
tax.
–Empowering the poor to become self
sufficient using muscle power and local
materials to develop rural estates
The single taxes
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You tax us when we buy and sell
You tax us when we work
You tax us when we invest
You tax our know-how and our inventions
You tax us at the petrol pump, the pub and
the airport
• You tax our art, our sport and our science
The double taxes
• If we can save up some (taxed) money
you tax us a second time on the interest
• If our business makes a profit you tax it
and then, if we reward our investors with a
dividend, you tax it again
• You tax us if we give (taxed) money to our
kids
• You tax us when we die
All these taxes stifle the economy
• If you tax anything but land you reduce its
supply
• By taxing sales, wages, investment and
savings you reduce them all
• Research indicates that GNP lost due to
“deadweight” taxes is as much as 30% or
R700bn GDP
• Existing tax laws undermine job creation
• If you collect the land rents idle land will be
bought into use
The Window Tax
• England 1696 - 1851
S.A. – a tax haven for landowners
• All increases in land value are caused by State
infrastructure or population increase – not by the
owner
• Yet Government allows owners to keep those
gains viz Gautrain R88bn wealth transfer
• Only the rich can afford land – average urban
plot now R450,000
• So South Africa is in fact a tax haven for the rich
• The rich make payments on account for tax and
recover these when they sell their land
Rules of good taxation
• Tax should be certain – no cheating, you
cannot cheat a land tax
• Tax should be simple and cheap to collect.
• Tax should not be counter-productive
(already shown above)
• Tax should be the same for all taxpayers,
so why are we favouring film makers?
• Existing tax laws fail dismally on all counts
• Land tax conforms to all these rules
Abolish all these taxes and collect
land rents instead
• Land rents are 30% of GNP in the
absence of all other taxes
• Collect land rents as an alternative to all
existing taxes
• Create a “tax haven” in South Africa and
watch the country grow
• Watch unemployment disappear
Income Tax Amendment Act
• To amend something as flawed as the
Income Tax laws is pointless
• This Act fails to fully meet your policy
objective of boosting household
confidence by PIT relief
• Therefore we urge this committee to
request that next year’s bill should include
the introduction of land tax
SINGLE LAND TAXES
• Vacant land prices are gradually retired:
affordable access for all
• Answers the question if land has no production
cost how can it have a price?
• Commences powerful wealth generator of “freeland tax haven” as Hong Kong
• Also known as nationalisation of land rent [not
land] and simultaneous privatisation of income
taxes
• How the poor can become millionaires
CONSTITUTIONAL COMPLIANCE
OF LAND TAXES
• Equality: end of discrimination towards landless
• Freedom: with land ownership citizens become free to
decline unwanted jobs
• Dignity: land ownership permits self-sufficiency
• Slavery: landless and jobless are worse off than
slaves
• Property: Sec 25.5. The state must take reasonable
legislative and other measures, within its available
resources, to foster conditions which enable citizens
to gain access to land on an equitable basis.
QUOTATIONS
• For efficiency, for adequate revenue and for
justice, 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.” Robert Solow,
Nobel Memorial Prize in Economics, 1987.
• Here are two simple principles, both of which are
self-evident:• That all men have equal rights to the use and
enjoyment of the elements provided by nature.
– That each man has an exclusive right to the use and
enjoyment of what is produced by his own labour.
• There is no conflict between these principles.
Henry George: Author of Progress and Poverty