# Social Category > South African Politics Forum >  Can SA survive given the following

## Dave A

An email doing the rounds at the moment -

In the light of SARS announcing that South Africas 5million taxpayers
must begin to submit their tax returns
for the support of this nation of 45 million people….


*CAN South Africa SURVIVE GIVEN THE FOLLOWING?* 

The folks who are getting free stuff, don't like the folks who are paying for the free stuff, because the folks who are paying for the free stuff can no longer afford to pay for both the free stuff and their own stuff. 

The folks who are paying for the free stuff want the free stuff to stop, and the folks who are getting the free stuff want even more free stuff on top of the free stuff they are already getting! 

Now...  The people who are forcing the people to pay for the free stuff have told the people who are RECEIVING the free stuff, that the people who are PAYING for the free stuff, are being mean, prejudiced, and racist. 

So...  The people who are GETTING the free stuff have been convinced they need to hate the people who are paying for the free stuff by the people who are forcing some people to pay for their free stuff, and giving them the free stuff in the first place. 

We have let the free stuff giving go on for so long that there are now more people getting free stuff than paying for the free stuff. 

Now understand this: all great democracies have committed financial suicidesomewhere between 200 and 250 years after being founded.  The reason?  The voters figured out they could vote themselves money from the treasury by electing people who promised to give them money from the treasury in exchange for electing them.  Thomas Jefferson said it best:  “Democracy will cease to exist when you take away from those who are willing to work and give to those who would not”. 

The number of people now getting free stuff out numbers the people paying for the free stuff.


ELECTION 2013 IS COMING... 

A Nation of Sheep Breeds a Government of Wolves! 

Only 86% will send this on; it should be 100%.  What do u think u should do ?????????

"The problem with socialism is that eventually you run out of other people's money." -
Margaret Thatcher

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Blurock (12-Jul-12), Citizen X (14-Jul-12), wynn (13-Jul-12)

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## adrianh

The most importand free stuff should be sterilization...

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Nickolai Naydenov (12-Jul-12)

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## Blurock

> The most importand free stuff should be sterilization...


I can not agree more. There is no such thing as global warming. The problem is caused by global breeding. We are disturbing the forces of nature which always work towards equilibrium. Humans are disturbing this balance. :Alien:

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## adrianh

If each and every person in this country got a job, house, car and cash tomorrow then nine months later there would be 10 times the population.

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## murdock

earth can do without humans...but the humans cannot do without earth...saw this on a movie the other night...but it rings in my head as i watch humans destroy the one thing that keeping us alive...

when we talk about a virus...the only real virus on earth is the human...it consumes...kills and destroys anything in it path...and the worse part...there is no cure.

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## Blurock

> If each and every person in this country got a job, house, car and cash tomorrow then nine months later there would be 10 times the population.


Nope. Roads will be congested. The workers get home too late. Then sit in front of the TV. No time for sex... :No:

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## Petrichor

Problem is it is only the people giving the free stuff that complains about this and probably understands the consequences

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## Pap_sak

I have no problem with the disability grant ( as long as its deserved) nether do I have problem with the small pension. I do have a problem with the grant for kids as I feel this money doesn't actually reach the kids and even though tiny, is a weird incentive to actually have kids. I would prefer schools to offer free uniforms,stationary and one proper,hot meal a day and supervised after school care.

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## vieome

In the light of SARS announcing that South Africas 5million taxpayers
must begin to submit their tax returns
for the support of this nation of 45 million people….

Just to throw a spanner at the works, is the above statement true? So often we believe things because we want them to be true. 

Lets assume that half a million are self employed non tax payers, that another half a drug lords , and another half crime barrens. 

http://mindhacks
This pattern is so common that psychologists have called it the fundamental attribution error. And there’s a whole branch of psychology that investigates how we reason about causes for things called attribution theory. The fundamental attribution error is a good example of a quirk in the way we reason about causes, but it isn’t the only one. Despite the name, it may not even be the most fundamental.

Seeking causes

Psychologists are interested in attribution of causation because it tells us important things about how the mind works. To illustrate this, imagine you see a man asleep under a tree, and a leaf fluttering down to land on his head. As the leaf touches his head he wakes up and shouts “Yikes”. Anyone watching this scene would assume the man woke up because of the falling leaf.

 But this simple statement is remarkably difficult to prove – you have no direct access to the cause, just the before (a leaf) and after (“Yikes”). We automatically assume the cause. We talk about it like it is a thing – somehow in the middle between the leaf and the man, but really it is just an assumption, not a thing. And indeed, some new information could come along and force us to reconsider our assumptions. We might find out later that a philosophically-minded ant had come along and, just at that minute, decided to bite the sleeping man’s hand.

 So our causes are assumptions, based on what we perceive but with an extra bit of imagination. They are necessary assumptions. Without looking for causes we would be stuck with a confusing picture of the world.

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## Mike C

> And indeed, some new information could come along and force us to reconsider our assumptions.


But until that new information comes along, would it not be simply foolish (unscientific even) to reject the original observation and conclusion?

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## rosa bester

i totally agree the grant for kids is going striaght to the bottle stores or drug dealers, and because its so easy to get grant for kids they make more and more kids knowing the tax payers will pay i hate it when people using other institutions for money for their bad habits and on the end or the day the children is suffering for their parents habits

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## vieome

Allow me to challenge your assumption with the following info.

Understanding the freeloaders
In the community of people dedicated to analyzing poverty, one of the sharpest debates is over why some poor people act in ways that ensure their continued indigence. Compared with the middle class or the wealthy, the poor are disproportionately likely to drop out of school, to have children while in their teens, to abuse drugs, to commit crimes, to not save when extra money comes their way, to not work. To an economist, this is irrational behavior. Karelis, a professor at George Washington University, has a simpler but far more radical argument to make: traditional economics just doesn't apply to the poor. When we're poor, Karelis argues, our economic worldview is shaped by deprivation, and we see the world around us not in terms of goods to be consumed but as problems to be alleviated. This is where the bee stings come in: A person with one bee sting is highly motivated to get it treated. But a person with multiple bee stings does not have much incentive to get one sting treated, because the others will still throb. The more of a painful or undesirable thing one has (i.e. the poorer one is) the less likely one is to do anything about any one problem. Poverty is less a matter of having few goods than having lots of problems.

Poverty and wealth, by this logic, don't just fall along a continuum the way hot and cold or short and tall do. They are instead fundamentally different experiences, each working on the human psyche in its own way. At some point between the two, people stop thinking in terms of goods and start thinking in terms of problems, and that shift has enormous consequences. Perhaps because economists, by and large, are well-off, he suggests, they've failed to see the shift at all.

When one looks at takers and the givers would it be fair to make the assumption that the majority of givers are white, and the majority of takers are black? So if a giver A has a business that employs 100 people is affected by a given taking policy e.g BBE, the giver A then takes offence and cuts down his work force to 50 people creating 50 new takers. My point is we are all in this together, the minute we segregate between givers and takers, without understanding what it means to be a taker, we only increase our problems in the country.

One Edit 4:14 change on givers to takers

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Blurock (13-Jul-12)

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## adrianh

@vieome - I really like the way you think.

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vieome (13-Jul-12)

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## Dave A

That discussion on poverty reminded me of this quote:

Being broke is a temporary situation. Being poor is a state of mind. ~ Mike Todd.

The difficulty I see is social grants *do* help alleviate the plight of people in dire need. It's *a* solution, but is it the *best* solution? It's a salve for the symptoms, but does it help cure the disease at the root of it all - the poverty mindset? If anything, evidence suggests it aggravates it  :Frown: 

Tougher still, this was a view I'd formed some years ago, but I believe we've got a bigger problem looming that will make the "poverty mindset problem" obsolete.

The solution to the poverty mindset is to nurture a sense of self-worth and achievement. This isn't the contrived facade of entitlement (rights), but that deeply satisfying sense that you have worked for, earned and deserve what you have (as little as that may happen to be).

But what do you do if there simply aren't enough opportunities out there anymore to ensure that everyone can contribute to society and "earn their way"?

Technology is wiping away jobs at an enormous rate. It's hard to think of an enterprise out there that isn't producing more while using less people.

If the boss had to send a letter out to a client or supplier on the company letterhead, he (and much more likely it *was* "he" back then) would have to get a typist to type it up for him. Then someone would have to get the letter to the post office. Lot's of people later it would be delivered to the recipient, who would also need a typist to respond.

Now the boss types it him or herself and emails it. How many jobs gone forever just in word processor and email technology?

The architect had to employ teams of draughtsman to draw up plans for big buildings. Nowadays it's the architect on his own and CAD. All the draughtsmen are gone, along with the payroll department, the tea girl, the receptionist, the secretaries, the bean counter... One old time architect I came across not too long ago said he used to employ two hundred people. Nowadays it's him on his own, *and* he's producing more than he did back then too.

The incentive to work has to be in place. But how the heck do you make sure there's enough work positions available in a world that is able to increase output while rapidly reducing the number of people they need to achieve that growth?

Maybe the poverty trap is no longer the problem. Are we running headlong into an efficiency trap?

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## vieome

*@DaveA*, very interesting points.
I remember in the past when Companies started automating, like the Car industry there was serious complaints about what it would do to jobs, but technology has sneaked into every aspect of our lives and we do did not see something like that coming. Ted Kaczynski the uni-bomber put forward a similiar argument. And Kevin Kelly editor of wired in his book what technology wants put forward a similiar argument infact going on to say that Ted Kaczynski was right. Perhaps it is time for people to cut the amount of hours we work, job share, enjoy the free time.

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## Blurock

> That discussion on poverty reminded me of this quote:
> 
> Being broke is a temporary situation. Being poor is a state of mind. ~ Mike Todd.


Very true. They say that poor people wait for their ship to come in. Successful people build their own ship.




> Technology is wiping away jobs at an enormous rate. It's hard to think of an enterprise out there that isn't producing more while using less people.
> 
> If the boss had to send a letter out to a client or supplier on the company letterhead, he (and much more likely it *was* "he" back then) would have to get a typist to type it up for him. Then someone would have to get the letter to the post office. Lot's of people later it would be delivered to the recipient, who would also need a typist to respond.
> 
> Now the boss types it him or herself and emails it. How many jobs gone forever just in word processor and email technology?


But technology also creates other more high tech jobs. We now need programmers, PC builders, data capturers and a horde of jobs that did not exist before. In our case, I believe our education did not keep up with technology. Poor people get despondent because they see no future for themselves. 

A teacher once told me that his pupils, when asked about their poor results, responded that "why should we learn, we will not get jobs anyway". So sad. As education is the first step in creating wealth.

Maybe we need something like "The American Dream". Something that will motivate us as a nation to work towards greatness. But for that we need new leaders who can inspire us and not the current kleptomaniacs who think only of themselves.

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## wynn

I personally believe that income tax is the problem!

The so called 5 million who contribute to the fiscus only contribute a small portion by way of personal tax.

Company tax and duties is the main contributor.

Now if some clever mathamatician did the calculation as to how much VAT should be increased by to take up the personal tax shortfall we would all pay tax equally according to our spendings, not our earnings, I would guess 20%?
After all the government wants more tax payers to fall into the tax paying net, and for a cheaper collection rate this is the answer.
You would not have to register for tax as an individual and unless you wished to claim benefits you would register for same at the local clinic/distribution centre so the tax collection admin would be more than halved releasing more SARS employees to inspect and police VAT registration of business, those that are not VAT registered simply pay VAT when they purchase the goods they intend selling and cant claim it from their turnover.

Obviously there would have to be zero rated essentials like bread, milk, unprocessed meat, veggies etc. while at the other end of the scale VAT on luxury goods should be at a higher rate than everything else eg. cars, a run of the mill family vehicle would be at say 20% VAT whereas a luxury Merc would be at 50% VAT

Also in each community a clinic/distribution centre for distribution of basics like baby clothes, blankets, baby food for poor mothers, no cash.
Also distributing of food and other requisites for pensioners and the infirm and disabled which would also include a feeding and basic clothing station for the indigent, unemployed and homeless.
Education and basic medical care would be free, with the above beneficiaries also getting free specialised medical care on a needs basis.

With this type of VAT collection even the drug lords and shebeen queens would pay tax on money they spend for everything besides essentials.

There would be no personal tax so everything you earn as an individual is yours to dispose of as you see fit, if you would rather buy a Merc or jewelery than investing you will pay the tax.

I am sure that savings would go through the roof and that would only be good for the country, also we would probably find out that a basic 20% VAT on top of existing company tax would cover most state expenditure.

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## Dave A

> But technology also creates other more high tech jobs.


Not nearly as many as that same technology has made redundant, I fear. But I agree with your other points wholeheartedly.

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## Dave A

> Perhaps it is time for people to cut the amount of hours we work, job share, enjoy the free time.


That might be what it takes to break the trap in the end. I'd expect a bumpy road getting there, though.

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## gac

You see its far easier to take from those who have and give to those who have not than it is to create a stong healthy vibrant economy that reduces reliance on the state. More scarily, it is indeed an imperative to do so in order to entrench a dictatorship in power by increasing the dependency of the masses on the state for their survival in a democrcy, whilst attempting to weaken the power of the wealthy minority. In the end the people will not be in a position to oust the government and voila, a government that cannot be removed. Oh happy days!

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## BusFact

> I personally believe that income tax is the problem!
> 
> The so called 5 million who contribute to the fiscus only contribute a small portion by way of personal tax.
> 
> Company tax and duties is the main contributor.
> 
> Now if some clever mathamatician did the calculation as to how much VAT should be increased by to take up the personal tax shortfall we would all pay tax equally according to our spendings, not our earnings, I would guess 20%?


Interesting concept. I would take it one step further though. Transaction tax. The problem with VAT is that it still requires admin and allows people to fiddle the calculations.

With a transaction tax, every single transaction passing through a bank account is taxed at a fixed rate at say 2%. So when you want to buy a R100 item at Pick n Pay on your card, you will in fact pay R100 + R2 (in a very similar way to the current bank charge system). Pick n Pay will receive R100 in their account but also be taxed R2 for receiving it. So effectively You pay R102, Pick n Pay receives R98 and SARS get R4.

This happens for every single transaction going through the bank system. It replaces Income tax, CGT, VAT and possibly even UIF, SDL, petrol tax and others.

- No more complicated tax returns. The beauty of this system is its simplicity. It all happens automatically behind the scenes.
- This makes avoiding tax very difficult and often not worth the effort.
- All collecting is done by the banks so SARS can monitor a dozen institutions instead of 5 million plus individuals.
- A fairer system in that taxes are in line with your use of the general economy. The more you spend / receive the more you are taxed.
- There would be no more need for company financials or accountants. You have the option of still doing so from a business efficiency point of view, but their is no tax need to do so.
- Loss making companies still contribute and so the profitable ones don't have to bear the full burden.
- No more panic because your cash flow does not allow for that VAT return payment or provisional payment, as all taxes are deducted on cash flow.
- Even criminals now pay more tax as they spend their proceeds.
- Certain industries can still be taxed more by requiring them to have licences which will make tax admin an issue only for them. Eg Mining, Luxury goods, Alcohol, Tobacco, etc.
- Instead of "zero rating" certain goods, rather provide rebates back to those industries. This keeps the system as simple as possible for the bulk of the public, with only a few entities having to keep detailed tax records.
- A larger tax base results as almost everyone is contributing.
- Cash is the obvious means for avoidance and this can be discouraged by making it expensive to withdraw, limiting amounts people may keep, limiting the amount of cash that can be received, limiting cash in the system and changing the notes every few years to force deposits, etc.

My only concern is the 2% assumption made in the beginning. For the system to work, it needs to be a low amount so that people find it reasonably insignificant per transaction which removes the incentive for avoidance. I'm not sure what the figure would be to get the same revenue for SARs as through their existing system, because I couldn't find what the annual total of transactions through our banks was in a year. So I had to use my personal experience and a few JSE listed companies to come to my figure.

Apparently Brazil tried such a system a while back, but info is scarce. It seems to have been reasonably successful, but I can't find any good reasons for them stopping it.

Wouldn't it be nice to have a hassle free tax system?

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## Citizen X

Diability grant and pension grant I actually support. I also support quality health care for all. Attitudes are changing, people on the grassroots level are not fools! All their violent and vociferous service delivery are directly at the anc gov. I think we've reached a point where people are realised that the anc gov, esp, leadership are living extravagant lives just like the king, queen and elite of France were in the months and years preceding the french rev. I think that the vast majority of SA's would much rather have a competetnt government that can use resourses wisely to address of many problems, manage the process of governace, deal with corrupt officials harshly, root out nepotism and tenderpreneurship and listen to what people are saying. I'm not so confident that the anc will do as well as they think they will do in the next election. People of all races, religions, cultures, subcultures, languages are sick and tired of this sorry song and dance the anc keeps giving us....

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## Justloadit

Transaction tax sounds great, but in my business, in some cases I make less than 0.5% profit on the sale, so the tax would eradicate my bottom line. This was the problem we had years ago with the municipal tax (I think it was called), where the local municipality use to make 1.5% of every transaction. They made more money than what we made, and we were doing all the work.

Secondly much business is made with cash money, so it does not even reach the bank account.

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## Pap_sak

Dave A

You right in certain regards - the job market has changed - no more typing pools!

But new "professions" have also pop up : IT, human resources, spin doctors, health & safety, project managers...hell I am sure there were not many fitness instructors 60 years ago!

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## Blurock

> Dave A
> 
> You right in certain regards - the job market has changed - no more typing pools!
> 
> But new "professions" have also pop up : IT, human resources, spin doctors, health & safety, project managers...hell I am sure there were not many fitness instructors 60 years ago!


New technologies require new skills. Unfortunately our education is lagging and we have not been able to keep up with the rest of the world.

The new SKA kilometre array telescope will inject direct investment of more than EUR 1.5 billion into South Africa. Sadly, most of the scientists and skilled people required will come from other parts of the world as we just do not have the people to operate it. 

When we think job creation, we think pick and shovel, we do not think of acquiring the necessary skills to move up the ladder. When you are at the base of the pyramid, you have to compete with many other building blocks and carry a heavy load. Remember, there is always room at the top, but it is a long way up! :Yes:

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## BusFact

> I'm not so confident that the anc will do as well as they think they will do in the next election. People of all races, religions, cultures, subcultures, languages are sick and tired of this sorry song and dance the anc keeps giving us....


I thought (hoped) that would happen in the last elections, but it didn't. I think they still have a very strong support base. If people become disillusioned with voting they seem to stop voting altogether rather than vote for the opposition.

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## BusFact

> Transaction tax sounds great, but in my business, in some cases I make less than 0.5% profit on the sale, so the tax would eradicate my bottom line. This was the problem we had years ago with the municipal tax (I think it was called), where the local municipality use to make 1.5% of every transaction. They made more money than what we made, and we were doing all the work.


Regional services levy was the name of that darned thing. It still required you to fill in that bliksem form and make the monthly payment. The proposal I put forward wants this to happen automatically off the bank account so no paper work is required and no monthly payment. Instead it comes off each transaction through your account like a bank charge does now on some accounts. 

I do agree that low margin businesses will be affected, but you (you and your competitors) will all be affected equally, so margins for you and your competitors would have to improve to 4,5%. The paradigm shift is to tax the activity of the business or person. High volume business (plastics, bitumen, concrete, steel, etc) use significant amounts of state infrastructure to transport (roads, ports, etc) and make (water for eg) their products, but if they are not profitable they pay reduced taxes and are in part therefore subsidised by profitable businesses who pay higher taxes.

Don't forget any VAT and PAYE that you are currently having to administer and pay will fall away.



> Secondly much business is made with cash money, so it does not even reach the bank account.


And my assumption is that many cash businesses don't pay tax or fiddle the books to reduce tax anyway. By reducing cash in circulation, increasing costs of doing cash withdrawals, limiting cash that can be held by an individual or business and changing bank notes every few years to force deposits, together with making the use of cards much simpler and cost effective, we can continue moving away from a cash economy.

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## Dave A

And increase our dependance on banks - those bastions of integrity  :Stick Out Tongue: 

I have to be honest, I'm not at all sure this is the best way to go. There are so many other options for collecting tax - less lopsided ones.

And it seems currently the problem is less about how we collect it, and a lot more about how government is spending it.

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## vieome

> New technologies require new skills. Unfortunately our education is lagging and we have not been able to keep up with the rest of the world.


While I agree with your statement I would also like to point out the following, the Irony of it, is that much of the technologies that we use were developed by college drop outs. Many of the computer hackers(someone who makes a computer do what they want as opposed to crackers -people that break into computer systems) of this world are self taught. I think a better understanding of poverty and better ways of helping people escape the poverty trap will determine the future of the country. 

If one is living below the poverty line and in an area for the below the poverty line, the kids will look to those who have managed to escape the poverty. If the escape was through education many will chase education. However in africa most that escape poverty is either through crime or corruption thus the society which has a larger amount of people below the poverty line, begin their evolution towards a more corrupt society. Corruption and Crime are faster ways to escape poverty, and once the corruption virus sets in, there is no stopping it. A whole generation of people are now created who believe that the only way they will ever get anywhere is through corruption, there are no examples of people who escaped through any other means.

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BusFact (17-Jul-12), Dave A (17-Jul-12)

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## BusFact

> And increase our dependance on banks - those bastions of integrity 
> I have to be honest, I'm not at all sure this is the best way to go. There are so many other options for collecting tax - less lopsided ones.
> And it seems currently the problem is less about how we collect it, and a lot more about how government is spending it.


I totally agree that how tax is spent is a major issue, but I spend so much unnecessary time collecting tax for the government (VAT and EMP), completing their forms  
and trying to stay current on all the annual tax changes. It just seems such a waste of time and resources. The annual EMP501 really brings this concept to the fore each year. I really believe our tax system is just way too complicated. Accountants and lawyers spend can major at university in these fields and then you and I are somehow expected to also be compliant.

Are the other options you have in mind simple methods? Why do you say its "lop sided".

I don't see it as increasing our dependance on the banks. It becomes a service they render for SARS in the same way that they (and we) do their current VAT returns for example. SARS can then keep a beady eye on just a handful of organisations. It would actually be an extra cost to the banks to control and administer this tax system making their lives more difficult, but ours easier. Our current relationship (and I use that term loosely) with the banks does not change at all.

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## Dave A

> Why do you say its "lop sided".


It basically makes no attempt to tax the cash economy in any way whatsoever. Legitimise a tax free cash economy and watch it grow...

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## wynn

journalist Chris Hayes argues that what happened is this: Our ruling class failed us. Behind the seemingly haphazard pile-up of recent calamities he sees a pattern: In each case, a cadre of Very Important People succumbed to some combination of blinkered groupthink, deception, self-dealing, fraud, smugness, and self-delusion. And in virtually every case, they escaped accountability.

You thought this was about South Africa right?

Wrong

Read more: http://www.rollingstone.com/politics...#ixzz20tbTjUzL

Could be though

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## BusFact

> It basically makes no attempt to tax the cash economy in any way whatsoever. Legitimise a tax free cash economy and watch it grow...


Ultimately the goal would be to phase out the cash economy altogether. In the interim it is not tax free as companies would be expected to bank their receipts every day (or at least pay across the tax as if it had been banked - more admin but only by choice), but this would probably be commonly avoided just like cash income is today. 

Reduced cash in circulation, regular note changes to ensure deposits, limits on cash allowed to be held, limits on the value of transactions that can be paid for by cash, high cash withdrawal fees: These are all means to discourage the cash economy.

My take is that more tax will be generated once this already "tax free" cash economy is practically eliminated all together. A side benefit is that a cashless economy makes it more difficult to hide ill gotten funds.

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## Dave A

You don't think the cash economy option is the only thing that inhibits banks from raping us more than they do already?

And on companies banking cash - you don't think with a 4.5% saving on the line they might not reconsider their processes?
Look at what lengths many people will go to already to save 1% or less for depositing cash, let alone legally skipping a 4.5% tax. 




> In the interim it is not tax free as companies would be expected to bank their receipts every day (or at least pay across the tax as if it had been banked - more admin but only by choice)


Changing the rules already? I thought the idea was to have only the banks burdened with collecting, administering and paying over this tax.

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## wynn

The idea of charging a higher VAT instead of personal tax is that most vendors are already registered and the penalty for those in the cash/informal economy that are not registered will be the VAT itself, so it will pay that 'shebeen queen' to be registered as a VAT vendor (who can afford to kiss R12280.70 off on an inclusive total R100,000.oo PM purchases?)

It's not as if SARS need to lay anyone off, just change focus to policing registered vendors and recruiting unregistered ones.

Accountants and bookkeepers will be just as busy as always with the companies.

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## BusFact

> You don't think the cash economy option is the only thing that inhibits banks from raping us more than they do already?


Hmmm perhaps. But the "raping" tends to occur more when debt is involved. Simple transaction accounts aren't always so bad. Capitec is an example where some account costs are pretty low. 




> And on companies banking cash - you don't think with a 4.5% saving on the line they might not reconsider their processes?
> Look at what lengths many people will go to already to save 1% or less for depositing cash, let alone legally skipping a 4.5% tax. 
> Changing the rules already? I thought the idea was to have only the banks burdened with collecting, administering and paying over this tax.


Hey, this is an idea, not a finely tuned thesis - its a work in progress  :Smile: . But I don't think I'm changing the rules ... yet. The cash economy should be phased out over time. The interim period is going to involve plenty of effort to discourage it. One of those methods could be to force additional admin on businesses wishing to trade in a lot of cash or alternatively require them to have an expensive licence. If t

For the vast majority of individuals and businesses, they won't conduct much trade in cash - if at all, and so will have none of this admin. Eventually, when cash is removed, no one will affected by this admin.

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## gac

I wonder if the 5 in 45 statistic quoted by SARS is fundamentally much different from say 20 years ago and doubt it. Therefore Dave's suggestion that the problem is not so much in the collection but perhaps the spending is a more realistic summation of the current problem. Not to say that the various solution suggestions don't have merit. Certainly however, one of the first and easiest actions to take SHOULD be to curb uneccessary, wasteful and negligent expenditure, something this government is EXTREMELY guilty of. For as long as money if being wasted as it is, no amount of increased collection will satisfy the requirement. If we need to increase the quantity of pure juice from the oranges we crush, we can improve the crushing process to a maximum point, procure better bigger oranges, run the risk of cheating by diluting the mix however the bottom line is to increase the number of oranges on the input side.

In driving through many previously disadvantaged areas I can't help but notice the increased standard of living, evidenced by the many homes that clearly exceed the municipal rates threshold (the value at which one is required to start paying rates). Many of these homes appear to exceed the size and value of similar houses in suburbs that are in the rates net. This is just one example of missed opportunity, deliberate or not, to widen the rates base and increase the collection base. If anybody can afford that quality and size of home, they can clearly afford to contribute to rates coffers and spread the load. 

On increasing the tax base, real incentives need to be created in government spending that creates enabling environments for business that encourages and implores businesses to expand, invest, employ in sustainable industries. Offering "Band Aids" like grants and other social once-off events are helpful but not useful in addressing the fundamental structural issues that could secure the future. But politics is an evil so few of us recognises and we continue to be blindly led.

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## gac

Should read "...are helpful but NOT useful in addressing..." 
Apologies

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## desA

> *HARD WORK*


Two of the worst four letter swear words in the SA 'workers' vocabulary.

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## Dave A

A Psalm for Eskom

The Taxpayer is my source of income,
   I lack nothing.
He feeds me at family fun days,
   funds my budget and, 
   refreshes my balance sheet. 
Even though Terence reports 
   unauthorised, irregular, fruitless and 
   wasteful expenditure,
I will fear no evil, 
   For the taxpayer is with me; 
   Your taxes and your savings,
   comfort me.

This psalm came as a prelude in an email with even more sobering thoughts:



> Mike Schussler estimates that if South Africa were to pay the average civil servant the same as the average formal private sector employee we would immediately save R100 billion a year - this is an equivalent of five Gauteng freeway projects a year - free from any tolls and with no extra taxes required.
> 
> If South Africa were to be so bold as to pay civil servant only 90% of their private sector equivalents - we could build a coal fired power station at a cost of R111 Billion every year. We will be able to do this without any increases in electricity prices.
> 
> It was recently reported that Eskom spent R36million on "family fun days" to increase the morale of its workforce. To put this into perspective: it is enough money to power more than a million poor households with a basic free electricity subsidy for a month.
> 
> This comes on the back of a 16% tariff hike and flies in the face of President Jacob Zuma's call on the parastatal to cushion the price blow for consumer.


So is the problem *really* how we collect tax, or how government spends it.

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## BusFact

> So is the problem *really* how we collect tax, or how government spends it.


Undoubtedly the spending is the main issue.... by far. That doesn't mean that collections can't be simplified. Its just so ridiculously complicated at the moment.

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