This tax could help land the un­em­ployed jobs

The Star Early Edition - - INSIDE - An­dre Quin­lan

JOHN Kane-Ber­man of the SA In­sti­tute of Race Re­la­tions has pointed out that the na­tion’s most im­por­tant is­sue is to “make eco­nomic growth the over­rid­ing pri­or­ity”.

How this is to be done seems to have eluded the coun­try’s lead­ers, the govern­ment, and most econ­o­mists and com­men­ta­tors.

Few, if any, econ­o­mists will ever point to the ele­phant in the tax room – the one com­po­nent of tax­a­tion that is com­pletely ig­nored. Yet, if col­lected, it has the po­ten­tial to ex­ceed the to­tal of all the other taxes. It is land value tax­a­tion (LVT).

LVT is no longer taught at uni­ver­si­ties and has been ig­nored for the bet­ter part of a cen­tury.

I have had per­sonal ex­pe­ri­ence of this. All the great econ­o­mists since Adam Smith have high­lighted LVT as the main source of govern­ment rev­enue, but the rich, un­der­stand­ably, have sought to keep knowl­edge of this tax quiet as they would have to pay most of it.

There are a num­ber of Asian coun­tries that use LVT as their main source of rev­enue, in­clud­ing Sin­ga­pore, Hong Kong, Tai­wan and Ja­pan.

The main ad­van­tage of LVT is it is im­pos­si­ble to avoid or evade, and it shifts the bur­den of tax­a­tion to the rich who can most af­ford to pay this tax.

An in­te­gral part of this so­lu­tion is the elim­i­na­tion of VAT, and a pro­gres­sive re­duc­tion in in­come tax and com­pany taxes/red tape, as LVT is pro­gres­sively in­tro­duced (over 10 years).

Also among the ben­e­fits is it re­duces un­em­ploy­ment, and is friendly to the poor.

I would also sug­gest the govern­ment in­tro­duces leg­is­la­tion that will en­cour­age firms to em­ploy peo­ple un­der 30 years of age, and not tax them for two years.

It has been proved that young peo­ple who have a job for a year will prob­a­bly work for their whole lives.

The govern­ment should seek to in­crease taxes, and en­cour­age richer peo­ple and firms to ac­tively em­ploy more peo­ple. Eden­vale

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