Aliyah Blog

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High Tax Burden on the Minority in Israel

with 2 comments

From YNet:

Those Israelis whose income places them in Israel’s top 20th percentile pay 80% of the taxes that are levied in Israel, according to the yearly report published by the Finance Ministry’s State Income Authority Sunday.

In addition, the salary of almost half (47%) of salaried workers in Israel is not high enough to be subject to income tax.

Ouch! (I should know – I have the privilege of being counted among the 20% who shoulder the bulk to the tax burden. My current rate is 37%, not including bituach leumi).

IRIS (who quoted the article first) points out the following:

This is an Achilles’ Heel of democracies. The majority can vote to confiscate the wealth of the wealthier minority. In a small country like Israel, the productive minority can then respond by shielding their wealth through paying off government and legal “fixers” or by staying out completely, which then impoverishes the nation.

In other words, the situation wont be changing soon, as the 47% of salaried workers who do not pay any taxes (and the lowest tax bracket who pays next to nothing – together with the retired they are the overwhelming majority) will try their best to keep it this way. Of course, if Netanyahu wins the next election, we could see some progress…

Written by Yaakov

October 8th, 2007 at 9:01 pm

Posted in Aliyah,Experiences,Jobs

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