WHEN WORK IS TAXED MORE HEAVILY THAN WEALTH, FAIRNESS BECOMES HARDER TO DEFEND
A call from 120 millionaires to pay more tax exposes a deeper question about who carries the burden of building a functioning society.
A salaried worker does not choose whether to contribute.
The tax is deducted before the money reaches the bank account. The payslip records the obligation, the state receives its portion and the household builds the rest of the month around what remains.
A wealthy investor may experience taxation differently. Much of that person’s financial growth may come not through a monthly salary, but through shares, businesses and assets increasing in value.
The same economy rewards both forms of success.
The tax system may not treat them equally.
That tension sits beneath the unusual demand from 120 British millionaires asking their government to tax them more. Their appeal sounds almost contradictory. Wealthy people usually resist higher taxes. These signatories argue that they can afford them.
Their proposal raises a more important question than whether the rich are feeling generous.
Why should income created through work carry a heavier burden than wealth created through ownership?
CHARITY CANNOT REPLACE A PUBLIC SYSTEM
The immediate objection is obvious.
If a millionaire wants to contribute more, nothing prevents that person from donating to a hospital, supporting a school or transferring money to a public cause.
Gareth Edwards captures that challenge plainly in the Number of the Day conversation:
“Who’s stopping you? Go for it. Do it.”
But voluntary giving and taxation perform different social functions.
A donation remains under the donor’s control. The giver decides which cause is worthy, how much support it receives and when that support ends. It can transform lives, but it does not create a stable public system.
Taxation removes that discretion.
It establishes an agreed obligation across everyone who meets the same conditions. Government can plan around the revenue. Citizens can demand accountability for how it is spent. The contribution no longer depends on whether one wealthy individual happens to feel generous this year.
Philanthropy can fill a gap.
It should not determine whether the gap is filled at all.
When schools, healthcare, infrastructure or social protection depend too heavily on private benevolence, public priorities begin to reflect the preferences of donors rather than the collective decisions of citizens.
That is why the millionaires’ campaign asks for policy rather than applause.
THE TAX SYSTEM REWARDS HOW MONEY IS MADE
South Africa’s top marginal personal-income-tax rate reaches 45%.
That rate does not apply to every rand earned, and not every salaried worker reaches it. It nevertheless represents the highest rate applied to taxable personal income.
The episode contrasts this with an effective capital-gains-tax rate of up to 18% for individuals.
The two figures do not operate in precisely the same way. Capital gains are calculated through a different mechanism and generally arise when an asset is sold at a profit.
The comparison still reveals an important structural choice.
A person who becomes wealthier through a salary may face a higher rate than someone whose existing wealth grows through ownership.
This creates a compounding advantage.
The employee exchanges time and labour for income. Tax arrives immediately.
The asset owner may watch wealth grow without selling. Tax may only become payable when the gain is realised, and the effective rate may remain below the highest rate applied to salary income.
The system is not necessarily designed to punish workers. Lower taxation of investment may be intended to reward risk, encourage business activity and support economic growth.
Yet the result can still feel difficult to justify.
People who rely on work carry a visible and immediate burden.
People who already own productive assets may have more control over when and how their gains become taxable.
The inequality is not only in how much people own.
It is also in how much flexibility ownership provides.
A FAIRER TAX CAN STILL CREATE AN ECONOMIC RISK
The argument for higher wealth taxes is emotionally powerful because it appears to place the greatest responsibility on those with the greatest capacity.
The economic objection cannot simply be dismissed.
Capital can move.
Investment decisions respond to incentives. An entrepreneur deciding where to build a company, hold assets or take a financial risk may consider the future tax burden. A policy designed to collect more from wealth can collect less than expected if the wealth leaves, the investment never arrives or the business is not created.
South Africa therefore cannot treat a wealth tax as a switch that can be turned on without consequence.
The design would matter.
The threshold would matter.
The treatment of productive businesses, retirement assets, property and illiquid wealth would matter.
Most importantly, public confidence in how the revenue is used would matter.
People may accept a larger contribution when they can see functioning schools, safe transport, reliable infrastructure and capable institutions.
A demand for more tax becomes much harder to defend when public money appears to disappear into failure.
Tax legitimacy does not begin with the rate.
It begins with trust.
INEQUALITY IS ALSO AN EMOTIONAL ECONOMY
Francis Herd makes the episode’s most consequential observation when he argues that formal taxation may address not only inequality, but also “the anger around the inequality”.
That anger cannot be measured only through income tables.
It grows when sacrifice appears uneven.
It grows when working people experience tax as unavoidable while extreme wealth appears protected by structures they cannot access.
It grows when public services fail, yet the visible signs of private abundance continue expanding.
A wealth tax would not erase South Africa’s historical inequality. It would not repair every institution or guarantee that revenue reaches the people who need it.
Its symbolic effect could still matter.
Public systems rely on more than money. They rely on legitimacy, the belief that the rules apply fairly and that no group is permanently protected from the sacrifices demanded of everyone else.
That is the real weight of the demand from the 120 millionaires.
They are not merely saying they can afford to pay more.
They are arguing that a society should not have to depend on their willingness to volunteer.
A fair system does not ask whether powerful people feel generous. It decides what a fair contribution requires, then applies that rule consistently.
The difficulty is ensuring that the rule is strong enough to reduce inequality without becoming so blunt that it destroys the investment needed to create future wealth.
That balance cannot be found through slogans.
But the status quo is also a choice, and it has consequences of its own.
When work appears to carry more responsibility than ownership, inequality begins to feel less like an unfortunate outcome and more like a protected design.
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