Check out this article in the Jerusalem Post on proposed tax-cuts that would be put in place over the next 7 years. To sum it up:
|Monthly Salary (NIS)||2008 tax rate||2015 tax rate||Current US Rate|
Yay! While this will still leave Israel tax rates higher than US rates, it makes up most of the difference, and in some cases will have a lower tax rate in Israel than in the US (more at the lower levels – Israel has a more progressive tax than the US does). Combine this with the proposed new tax benefits for olim and there goes at one more common excuse not to make aliyah.
(Note: US rates above based on an 3.35 exchange rate, and assume that you are filing in the US as a single person, since in Israel the income from each spouse is taxed at a different rate, based on that spouse’s tax bracket).