Consider taxpayers the engine of the economy – IRR – POLITICAL

Promoting economic growth, a sustainable fiscus and the economic empowerment of individuals is the central theme of the Institute of Race Relations (IRR) and IRR Legal’s submissions to the National Treasury this week.

The applications were made in response to invitations for public comment on the National Health Insurance (NHI), proposals for a Basic Income Grant (BIG) and proposals to introduce a wealth tax.

On the NHI, the IRR recommended that the National Treasury commission a study to assess the flight of taxpayers likely to result from the introduction of the NHI Fund and to measure the impact on the national fiscal budget. In addition, the IRR recommended that expenditure on public healthcare should be controlled and determined on a value-for-money basis. Finally, it calls for the NHI Act to be sent back to Parliament for comprehensive reconsideration.

IRR Researcher Anlu Keeve warns of the potential dangers of relying on high taxes to finance large-scale initiatives such as the NHI Fund. He explains: “Large changes in marginal tax rates can easily trigger behavioral changes, such as restructuring of income streams to minimize taxable gains or migration to lower-tax areas. These taxpayers often have high-demand skills and the financial means to relocate.” “The latter is particularly plausible considering that if this becomes a trend, the tax base will shrink and the pool of skilled labor will decrease, negatively affecting the country’s potential to generate income and grow the economy.”