University of Cape Town constitutional law expert Pierre de Vos on Wednesday argued South Africa should get rid of inheritance and heavily tax it as a form of redistribution in the country.
On his popular blog, Constitutionally Speaking, De Vos said inheritance was a method white South Africa was able to retain the wealth they accumulated over generations of colonial and apartheid rule.
Read the blog post here.
News24 asked him five questions about how practically South Africa can implement an inheritance tax, and whether there is any political will to implement it.
You are motivating for inheritance tax to be introduced in South Africa. How would it practically look like?
You know I am not an expert, so I avoided speaking about the practicality. For me, the important thing is that people should not unduly benefit because their parents have money. You can always make exceptions as I said in the piece: one must make sure that orphaned children are looked after, spouses, and so on. One can have a progressive sort of tax so the smaller your estate, the less tax you pay. I don’t know, I am not an expert in tax, but it is the concept that I am supporting.
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I think the idea is about questioning the idea of inheritance is something that should go beyond South Africa. There are practical issues if you only do it in one country such as emigration. But, I think there should be a movement across the globe to mitigate the effects of unbridled capitalism and this would be one of them.
Where would the money that is taken from inheritance go to?
That is another question. French economist Thomas Piketty, for example in the European context, he proposed in his new book that that money should finance a kind of inheritance for everybody, but when they are young, when they are 25. Because having access to capital is one of the most important indicators of success in your life. So that’s one idea. But obviously, the tax will go to the state. I think it would be interesting for people who are clever than me to come up with innovative ideas about how that tax could be ring-fenced and used in ways to address inequality.
Would an inheritance tax not infringe on people‘s right to property in the Constitution?
I think it would be easier to introduce the tax because there’s already a 20% inheritance tax on all inheritance over a certain amount in South Africa. So there’s already a tax on that. To completely abolish it and for the state just to take your property is probably going to be difficult to justify in terms of our Constitution. Obviously, it would require a complete overhaul of the current law of succession where the assumption is that you have absolute power to decide what happens to your property after you die.
Do you think there’s any political will in South Africa to actually implement it?
That is the problem, it’s the problem with all of these things: those of us who have money tend to protect our own interests.
Those are not only white people. So, getting these kinds of ideas through is difficult because in other countries like in the US and UK, for example, they’ve imposed in certain times of history certain types of inheritance tax, and it’s always extremely unpopular even with people who will never have to pay any tax in terms of this system, because people always think, wrongly, that they’re going to die with much more money than they actually do.
Wouldn’t it be argued then this can be seen as a different way of taking the land in SA?
I didn’t want to go there. It is one possible way of addressing almost the primal wound caused in South Africa by apartheid. It could be an alternative, it could be with, but it’s one way.
And, I don’t think it’s that revolutionary. It’s an incremental change. It’s conceptually revolutionary maybe in the sense that people believe this concept is completely normal and natural. The reason why I made the argument is to say, “these things, we just made them up”.
