Why South Africa Should Seriously Consider Taxing Its Wealthy Citizens

Ingrid Woolard, Stellenbosch University

This is an edited extract from a chapter in the recently published The state of the nation: poverty & inequality: diagnosis, prognosis and responses.

It’s well-established that South Africa has one of the most unequal income distributions in the world. Despite significant efforts by the State to stimulate inclusive growth, the income gap between the rich and the poor has continued to widen in post-apartheid South Africa.

A less explored topic is that of wealth inequality and, relatedly, the potential use of wealth taxation to reduce wealth inequality while also further diversifying the sources of much-needed government revenue.

For instance, high wealth inequality creates an imbalance of political power between citizens as the wealthy can potentially influence the political process unfairly. This can,