Black Tax must be Deductible!

Black Tax must be Deductible!

Black Tax is a real tax and as such it should be tax deductible.

I propose that anyone who pays for school fees, medical aid or any sundry expenses including pocket money for an uncle, niece, nephew, brother or sister should be able to claim deductions from such expenditure from SARS.

  • This would reduce the money to be paid to fees must fall.
  • More people would be put on family medical aid thus reducing the burden on national health care.
  • Reduction on child grants because the best credit rating system in the world is family.
  • People will be incentivized to assist family to move from poverty line.
  • This will lead to an indirect subsidy to the minimum wage via familial linkage.
  • Sasa won’t have to pay millions to third parties like Cash PayMasters in Grant disbursements ( yes the company that pays poor people has the word MASTER in it)

Black Tax rebate will help black people impeded by black tax to have a level playing field so that they can level up quicker in life, like their white counter parts. In case of an emergency in an airplane you are supposed to put on the oxygen mask over your nose and mouth first before you can help even your own child. The logic being that you can’t assist others if you are dead. Black Tax as benevolent and as important as it is, but is it not retarding the overall progress? Are we not trying to heat up the ocean with a kettle?

Black Tax is a genuine problem that needs to be properly investigated and quantified. The ramifications of not properly accounting for it, lead to a unintended generational debt and poverty trap. We could be politically correct and call the Black Tax, Ubuntu Tax. But the fact is; we live in a country where economic inequality is divided along the color line. With a Gini coefficient of 0.63 in 2015, the World Bank Report described South Africa as the most unequal country on earth! We have overtaken Brazil for this number one (or last) spot.

The report said South Africa’s high wealth inequality and low intergenerational mobility inherited from apartheid saw the disparities being passed down from generation to generation, with signs showing that the situation was worsening. This last finding is most gut wrenching. It’s not only saying we are poor, it’s saying that our unborn children are already poor. Think about that. Our unborn children are not only going to be Black Tax themselves but they will have an even higher black tax burden from an even poorer tax base.

The biggest reason why the Black Tax burden must be relieved is; if a child goes to an underprivileged school, and by the grace of God even makes it to university it is unlikely that they would get into an Ivy League university like Wits of UCT. Even if they made it into the Ivy Leagues it is even more unlikely that they will complete. This all due the social cost of going to such establishments. The cost is even higher if you don’t have a family member paying black tax on your behalf. The starting salary that you will receive from corporates should you then get employed, will discount your non Ivy League education, they will even discount your non private school accent. This means that your starting salary will be less than your colleagues. The starting salary you begin with is likely to determine all your future salaries earnings, as all increases are based on percentage increase of your current salary. Start low, you will always be low.

If we are to call Black Tax, Ubuntu Tax then white people must pay Ubuntu Tax too, so they too can qualify for the fore-said rebate. After 94, the word Ubuntu was used by everyone, so let’s now ALL start living it. There was a lady, I think her name was Magda or something, she was crucified by black twitter some months back. She suggested on Twitter we should all employ one additional Gardner or maid in order to create more jobs. I too was like bsh WTF?! I was like sit down! She was looking at the problem and solution from her rose tinted Tom Ford privilege glasses. She clearly doesn’t know what Black Tax is, I thought, and why would she? So what we as black twitter should have done; is taken this misguided Ms. goodie too-shoes and done the thinking for her, based on our lived experiences. What black Twitter’s response should have been; Magda how about you pay for your garner and maid’s children school fees and medical aid, instead. And guess what? we will even make it tax deductible so you can get all the other Housewives of Sandhurst to do it too!

Last week there was a big strike to raise the minimum wage. This strike was to raise the minimum wage to R20. That means there are people that are currently earning substantially less than R20 per hour. The problem however, is not only the minimum wage; it is in fact the maximum wage that is an even bigger problem. The same amount of vigor and strikes targeted at the minimum wage should be targeted at the maximum wage too.

If you reduce the maximum wage and redirect it to the base of the pyramid you solve two problems at once. Let’s be honest is you earn R20m pm what marginal utility do you derive from the additional Million? If you redistribute the million to the base of the pyramid you will have staff incentivized to work harder. That means they move up the pyramid. Maria Ramos and Magda as well as their financial services counterparts on average earn tens of millions per annum. Maria Ramos earned R62 million last year. To put in perspective, Maria Ramos earns R30K per hour. Now I know we are not comparing apples with apples but you will be hard pressed to explain this disparity. Mrs Ramos is highly qualified and deserves what she earns and yes it is a globally comparable salary. But look at this list of what SA bank execs earn, look at how many of them are black and how many are female and how many are black and female. The best way to address the bottom of the pyramid is from the top of the pyramid. Pun intended.

I propose that CEOs of listed companies not only should they have fiduciary responsibility to shareholders but also fiduciary responsibility to the country. In other words they too should pay Black Tax. In much the same way I would pay for my child’s education, healthcare etc, I also played a part in my niece finishing school, going to university and now she is about to become a lawyer. CEOs of corporates earn way too much to solely focus on their companies financials. They should be forced to dedicate 20% of their time to coming up with viable and financially sustainable national solutions. The SA government can’t keep doing the same thing for 24 years and expecting different results. This is why people in the North West are starting to take the matter in their own hands. More land grabs will also start if we don’t act creatively and quickly. If the CEOs don’t dedicate the 20% of their personal time and their company ‘s time…then they should be Black taxed 20% personally as well as their corporates. Imagine if Summercon Developments we’re forced as part of their Black Tax to build RDP houses, imagine how far we would be?

SA’s economy is not growing and no amount of taxes, increased minimum wage or Foreign Direct Investment is going to solve that. We need to grow the economy ourselves. Government has ran out of ideas, and the good ideas they do have, they lack the ability to implement. This is not a government bashing exercise but an alternative solutions one.

It’s time to lighten the blackness.

2 Comments
  • Osborn Nkosi
    Posted at 13:22h, 10 May Reply

    Great Idea This bring hope for a brighter future in Mzansi if there are still young ppl who can just think and come up with ideas like this I fully support this

  • Lebogang Modise
    Posted at 05:46h, 14 May Reply

    Dainfern is next door to Diepsloot. One of the best examples in describing the ‘Yin and Yang’ disparities.. My one friend and I have always thought that the poverty line between the 2 latter places can compliment each other. Like always bhuti wam’…. Siyabonga for your beautiful ‘gems’.

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