Thomas Piketty blames apartheid for SA’s high inequality

Thomas Piketty.

Renowned French economist Thomas Piketty has called for more transparency as a measure to deal with inequality and poverty.

Delivering the 13th annual Nelson Mandela Lecture at the University of Johannesburg’s Soweto Campus on Saturday afternoon, Piketty said South Africa needed a progressive tax regime. But to implement that, greater transparency about wealth was necessary. He said information about ownership of assets was inadequate at the moment.

He said such transparency should extend to multinationals doing business in Africa and these companies should disclose what they pay in taxes. “We need a legal system that allows African countries to develop a fair tax system,” Piketty said.

Piketty also reiterated his comments earlier this week about the benefits of an annual low-rate wealth tax. In his argument for a “progressive” tax regime, Piketty said history had proven that market forces, on their own, would not address inequality. Through “progressive” tax, the wealthy will pay more.

Piketty is the author of Capital in the Twenty-First Century, a book on wealth concentration and distribution.

South Africa’s National Development Plan (NDP) seeks to eliminate poverty and reduce inequality by 2030. The country, however, has its work cut out for itself. Piketty told the packed audience that South Africa had one of the highest levels of inequalities in the world. For instance, the top 10% of South Africans earn between 60% to 65% of total income.

“Many will say the inequality is because of unemployment. (But) unemployment is a symptom of inequality,” he said.

Countries such as Greece and Spain had high unemployment rates but did not have relatively high inequalities, he said. He blamed apartheid for South Africa’s high inequality.

Former President Kgalema Motlanthe, Deputy Chief Justice Dikgang Moseneke, former Finance Minister Trevor Manuel and Barclays Africa CEO Maria Ramos were among the guests at the annual lecture.

Source: Fin24

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