Trade unions in MLM
As seen above, their initial proposal is a more progressive tax system which would tax the rich at a higher rate than the poor, as adopted in most countries but more severely in some European countries such as France. This is an ongoing problem as the government seeks to spread the income earned amongst its citizens equally but is a highly unlikely goal in the foreseeable future.
The introduction of the solidarity tax is a modern thought that is used in Europe in countries like France and Germany and may seem to be a plausible step to increasing revenue and helping the economy. It is a quite probable step in the future if the GINI coefficient continues to rise and seems to be practical given the current distribution of wealth in the country.
Taxation on land and luxury items would also seem practical as a person would only require so much of both and would encourage the spending of money to back into other parts of the economy like the financial sector as investments which would boost the economy. However a negative effect of the luxury tax would mean that firms specialising in luxury goods would probably see a decline in revenue and demand and may cause consumers to be less willing to spend and more inclined to save. The luxury goods market may also be an important factor in our economy and may accidentally hurt the economy.
The introduction of an export tax on minerals may hurt the economy more than do it any good, as the mining sector is such an integral part of the country, by restricting it more than it already is with all the strikes and controversy surrounding it, may damage the flow of minerals and although promoting value addition, would probably only see value in the long term.
Using investment tax credits to persuade local enterprises to invest in capital is a positive initiative that should be seriously looked at in the long term and may greatly help the economy with sustaining a greater economic growth.
With regards to the financial tax, this can be seen as a step to stop the wealthy population from becoming wealthier at a fast rate. Although having good intentions, the wealthy would object to such a tax and it may slow down the economy in some way as this group may choose to save instead of invest as the tax may intend them to do.
Closing the wage gap is an ever and on-going problem and this means may prove to serve useful in eradicating the problem but may still not prompt the firms into closing the gap but rather seeing the tax as a running expense for the company.
Lastly, taxation on firms not complying to the minimum wage; this may help the workers being ‘exploited’ in the short term, but firms would find alternatives in the long run, especially if the minimum wage continues to be problematic.
COSATU’s submission also included proposals about development in the rural and agricultural sectors of the economy that can be seen as being in line with some of what the budget entails which included some of the following:
• Provision of affordable inputs to agriculture
• Strengthening the links between agriculture and agro-processing
• Provision of social and economic infrastructure in rural area
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