Seventeen percent of Israel’s population paid over three-quarters of the direct
taxes in 2008, while about half fell below the income-tax threshold, a report by
the Finance Ministry’s State Revenue Administration revealed on
The report – which used data from 2008, the last year of complete
available data, and modeled estimates for 2011 and 2012 – found that the overall
greatest contribution to the state’s direct tax revenues came from the second-
highest tax bracket, in which 6.4% of the population paid out 30.9% of the
Only a third as many people – 1.8% – paid into the top-tax
bracket, but the higher rate meant they represented 27.2% of the overall direct
Fully 43.7% of the population fell into the lowest tax
brackets of 10% or less, and represented a mere 2.4% of the tax
The number of people who, due to the tax structure and various
benefits given based on family status, fell below the income-tax threshold was
52.2% in 2010, 49.7% in 2011 and 52.3% in 2012.
On average, Israelis paid
20.6% in direct taxes, 13.4% in income tax and 7.6% on health and national
Post-tax inequality according to the Gini index had
dropped 2% in 2008, though it saw no such improvements through 2011, and experts
expected similar stasis for 2012.
The report also showed a wide gender
gap in income in 2008. On an hourly basis, women earned 21% less than men,
though that figure did not account for differences in position or seniority.
That figure was down from 36% in 1985, but exhibited no improvement over the
Because men worked an average of 10 hours a week more
than women, that gap increased to a net of 68% more in monthly income for
The progressive-tax structure narrowed that amount to 50.8% in 2011,
the report said, and men’s income tax rates were on average double those of
women. All these factors also led to smaller degrees of inequality between women
than between men.