Lapid and Steinitz at Finance Ministry handover 370.
(photo credit:Marc Israel Sellem/The Jerusalem Post)
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.
Relevant to your professional network? Please share on Linkedin