Wealth tax call draws mixed reactions

UNDERPRIVILEGED: Blacks were excluded from all sorts of public amenities in apartheid South Africa.
UNDERPRIVILEGED: Blacks were excluded from all sorts of public amenities in apartheid South Africa.

THE man who gave post-apartheid South Africa the moniker "rainbow nation" has done it again.

This time Nobel Peace laureate Archbishop Emeritus Desmond Tutu has thrown the cat among the pigeons by calling for a "wealth tax" to be imposed on white South Africans.

Speaking at a book launch in Cape Town last week, Tutu also pointed out that the call for a wealth tax was made by the Truth and Reconciliation Commission (of which he was head). He said it had received some support within the white community even then.

Tutu's main argument is that whites have unfairly benefited from apartheid and as a kind of redress, they should make a once-off payment into public coffers to fund projects aimed at improving the lot of those who continue to suffer the ravages of apartheid.

Responses to the call by the man who was commonly known as "the Arch" in his days as United Democratic Front patron, range from him being accused of "racist dementia" to having had "too much communion wine".

Among those who have shot down Tutu's call is another Nobel Peace Prize laureate, former president FW de Klerk.

Speaking through his foundation, De Klerk said the call would undermine one of the principles that "the Arch" was respected for forthrightly defending, that is non-racialism "and the idea that we should no longer adopt laws that are aimed at one or another racial grouping".

De Klerk went further to say it was also a fallacy to imagine that the living standards of white South Africans were due solely or even primarily to the exploitation of black South Africans.

"There is no reason to suppose that white South Africans would not have attained by their own efforts approximately that same level of social and economic development as European emigrants who settled in Australia, Canada and New Zealand," he said.

De Klerk must also consider constitutional expert Pierre de Vos's response to his assertions.

"Such measures (like the proposed once-off wealth tax for whites) are not "reverse discrimination" or "positive discrimination" but are rather "integral to reach our equality protection," De Vos wrote on his blog.

"If I had been born black and poor, I almost certainly would never have been a law professor (at the University of Cape Town) earning quite a nice salary, thank you."

De Klerk's argument against Tutu's call reminds one of the story of a white accounting lecturer at the then University of the North (Turfloop) in the 1980s.

The 26-year-old accounting lecturer would apparently boast to first year students about how he was one of the few chartered accountants in the country.

"From the son of a policeman to a charted accountant," the cocky lecturer would allegedly crow.

He would then ask one of his older students his age. If the hapless student revealed that he was the same age as the cocky lecturer, he would be derided about the fact that he was still in first year accounting at his "advanced age".

Like De Klerk, the lecturer was missing the fact that he was a beneficiary of an education system that was designed to make it difficult for blacks to become charted accountants.

This was an unfair race wherein the fortunate lecturer was allowed to take a few steps ahead of his black competitors.

That he might have been intelligent would have given him the further advantage of finishing the race in even less time than his less-gifted white compatriots.

In considering Tutu's call, it is also important that he has actually confirmed that what he has in mind is a "wealth tax".

Our understanding of a wealth tax is that it can only be paid by the wealthy. As Tutu has indicated, such a wealth tax can be determined by calculating an individual's net worth including stocks, financial securities and trusts.

This would help deal with the argument that there are poor whites who have not materially benefited from apartheid.

Globally, where the issue of a wealth tax has been discussed, an individual's net worth has been regarded as a good measure of the extent to which a household has profited from the economic policies and infrastructure provided by the government of the day.

In the case of our white compatriots, for example, it can be argued that the wealthy have profited more than their black compatriots from apartheid education, financial regulation, government subsidies and a judiciary that enforced commercial agreements in their favour.

De Vos has confirmed this in his statement.

Tutu's call is a moral one.

He is essentially asking whites to make a contribution towards redressing a situation in which they were systematically put at an advantage at the expense of their black compatriots.

Symbolically, the wealth tax would go a long way in showing whites' commitment to nation-building and reconciliation.

These once-off contributions could be made into a specific fund run by national Treasury to fund specific projects.

Having said so, it is obvious that there is a need to also make such a moral call to wealthy black South Africans to contribute to specific national projects aimed at dealing with the continuing social inequalities in the country.

One of the advantages of a wealth tax is that it has the potential of reducing inequality - something desperately needed in a highly unequal society like ours.

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