We are an informal Cape Town based professional think tank

1. 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

2. 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

3. The single taxes • 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

4. 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

5. 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

6. The Window Tax • England 1696 - 1851

7. 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

8. 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

9. 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

10. 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

11. 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 “free-land 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

12. 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.

13. 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