South African Government Taxes middle class citizens into poverty

South African Government Taxes middle class citizens into poverty

middle class
South African Government Taxes middle class citizens into poverty—

Government needs the South African middle class to grow, but instead seems intent on taxing them into poverty, and making it unlikely that they would be able to carry future burdens in taxes and government spending.

They will have to deal with rising inflation and rising interest rates which are much more severe than previously expected, due to the impact of the Russia/Ukraine war.

Mike Schűssler, Brenthurst Wealth consulting economist, and economist Elize Kruger, writing for Brenthurst Wealth, say the middle class will see higher real taxes in future as the debt burden grows and remain under pressure, and will only grow again when conditions are favourable.

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“South Africa does not need higher taxes on a smaller middle class, but lower taxes on a growing middle class, which will make SA more sustainable. But unlike early 1990, one has to wonder whether the actual political will of the ruling party is there. It has become extractive rather than enabling, at present.

“If government chooses a more enabling route, the country can get back on a sustainable growth and job creation path. It will take decades to wipe out unemployment, but at least growing numbers of employed people will create a bigger share of people to carry the exceptionally high tax burden that is likely to increase in the future.”

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