Tutu’s wealth tax not a bad idea – Prof Geoff Harris

Written by Kudzai Taruona

The proposal by Archbishop Emeritus Desmond Tutu to introduce a wealth tax for the super-rich is not at all a bad idea as it is an attempt to make them share their wealth with the poor, thus reduce the widening gap between the rich and poor in the South African society.

This was said Prof Geoff Harris, economics lecturer at the University of KwaZulu-Natal at a breakfast briefing organised by the Diakonia Council of Churches, on 25 August, as part of the activities of the biannual Social Justice Season.

“The wealth tax idea is not something from a lunatic bishop. It is something that many experts have proposed before. All it boils down to is making generosity a virtue. Tutu has started a conversation that we should all grapple with,” Prof Harris said.

He said there is a need to promote giving of the haves to the have-nots. One way of doing that, he suggested, is to set up a fund administered by a cross section of stakeholders in our society, into which the super-rich would voluntarily donate.

Prof Harris noted that the 2008 statistics indicate that the richest ten percent of households received almost forty times more than the poorest fifty percent, while the richest ten percent earned almost 150 times more than the poorest ten percent.

“Income inequality has worsened since 1994, partly because of the increasing inequality within the black community,” he added.

Income inequality has worsened because of the ascendency of the free market system, Prof Harris said, adding that the trend will continue unless there is government intervention to stop it. However, he was sceptical that government can introduce policies that can prevent inequality.

“A large proportion of the population are effectively excluded from meaningful participation in the economy because of a policy focus which has been tailored to fit the interests of the rich. Rich individuals often have a foot in both business and government. By contrast, the location of the poor, their lack of education and their lack of money mean that their voices are scarcely heard,” Prof Harris said.

The dangers of inequality are there for all to see. “It has strong causal links with ill-health, violence and other social ills. It is one of the key explanations of the very high levels of violence in South Africa. Regrettably, most violence is committed by the poor people against other poor people, with very little material reward, sometimes as a way of releasing frustration,” he said.

(Press Release by the Diakonia Council of Churches and used by permission.Visit them at www.diakonia.org.za.)