Competition for campaign contributions results in the rich paying too little tax

In response to  “No-one should be as rich as Elon Musk”, Mail&Guardian 20 January


In his article, Andile Zulu argues, inter alia, that ‘’billionaires are a hazardous symptom of the injustice of private property’’.

The reason the gap between rich and poor continues to widen is that political parties   routinely spend huge amounts of money on getting elected and, in order to obtain campaign contributions, have to provide the rich with policies that are more attractive to them than the policies offered by other political parties. This competition for campaign contributions is at its most intense in America (where the average senator spends a whopping $9.3-million on getting elected) and has resulted in a maximum tax rate of 37% for individuals, which only applies to individuals earning more than $518 000 (R7.85-million per year). This is a pittance when one considers that in South Africa, the maximum tax rate for individuals is 45% and applies to anyone earning more than R1.5-million per year!  Clearly, Elon Musk, who is worth an estimated $195-billion (and has most of his wealth tucked away in stock options that do not get taxed until the shares are sold), could be paying a lot more tax.    

Consequently, if communism is to be prevented from gaining popularity in developing nations such as South Africa, capitalism has to start delivering on its promises. It cannot keep expecting  poor and uneducated people to realise that communism is almost certain to make matters worse/compound our problems (because of a failure to provide workers — and farmers in particular — with an adequate incentive to produce more than they need for their own consumption). 

Hardly a day goes by without one of our local newspapers publishing a letter or article that rails against capitalism or private property.


Fortunately, President Ramaphosa recently signed the Political Party Funding Act into law, which forces political parties to disclose the names of persons making donations to them.This is a step in the right direction and is likely to make it more difficult for donors to pressurise politicians into doing their bidding.

The views expressed are those of the author and do not reflect the official policy or position of the Mail & Guardian.

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Terence Grant
Terence Grant is a Mail & Guardian reader from Cape Town

Related stories

Advertising

Subscribers only

Come what may, the UIF will pay

The fund – the main safety net for unemployed workers – will run at an almost R20-billion deficit

‘Terrorised’ family shines a light on traditional leadership for vulnerable...

The ambiguity between traditional and constitutional leadership has been exposed by the violent banishment of an Eastern Cape family

More top stories

Zondo commission: Molefe says Glencore sold Optimum to portray him...

Former Eskom chief executive paints himself as the victim of a plot at the hands of President Cyril Ramaphosa’s former business associates

Municipal workers convicted in R3.5m ‘Christmas cheer’ fund fraud scheme

A fund that was meant to provide much-needed, end-of-year cash for municipal workers was looted by the three signatories of the account

Tshiamiso Trust makes due on silicosis payout

Beneficiaries will now be able to apply to get money from the settlement almost two years after the Johannesburg high court ruled on the matter.

Shootings on Cape Flats claim 14 lives in less than...

At least 50 more police and other law enforcement officers were sent to the area in response to the spate of violence
Advertising

press releases

Loading latest Press Releases…