EQUALITY AND PERSONAL INCOME TAX - THE CLASSICAL ECONOMISTS AND THE KATZ COMMISSION

Abstract

In reforming South Africa's personal income tax system, the Katz Commission relied heavily on equality and the constitution. It did not, however, explain its understanding of the meaning of equality in general or equality of taxation in particular, being content merely to mechanically remove what it perceived to be discriminatory words in the legislation. The meaning of equality of taxation on the other hand, was thoroughly debated by the classical economists. This article explains the classical economists' meaning of equality of taxation and demonstrates that the classical system of equality and that achieved by implementing the Katz Commission's recommendations are vastly different. In particular lower income groups, single income households and families are considerably worse off.