It is worrying if the Johannesburg City Council contemplates tax hikes before warning its residents, Property rates hike on cards for Johannesburg (January 4).
Public debate before the decision is a democratic right. If the council widens the base for calculating tax without lowering the tax rate in compensation, it is guilty of ambushing residents in two ways: treating price inflation like asset growth and treating assets like income.
House price inflation has added new wealth only to people exiting the property market — and these are the people on whom the council will not levy property taxes.
The people the council will tax are either in the market already, and no richer than before (they must pay as much for the new house they buy as they won from the old house they sold) or entering the market, and are now poorer (their same income must cover twice the mortgage and more).
Increasing taxes on property ignores the reality that disposable incomes are static or falling and wants pay without performance. Increasing taxes without increasing services is predatory and no democratic council should do so.