Officials in many of the largest parties conceded on Wednesday that despite
promises from Prime Minister Binyamin Netanyahu, taxes would have to rise after
“The question is which taxes to raise and on whom,” former
finance minister MK Meir Sheetrit of The Tzipi Livni Party said at a panel
discussion at the College of Management in Rishon Lezion, which also included
officials from Likud Beytenu, Labor, Bayit Yehudi, Yesh Atid and Am
Netanyahu, he added, had foregone some NIS 75 billion in taxes
from the upper classes to keep taxes down.
Labor’s MK Avishai Braverman
said that corporate taxes were too low.
“Israel’s corporate tax rate is
25 percent. In Germany it’s 30%, in the US it’s 35%. Nothing will happen if we
raise it 2.5%,” he said. He also called for increasing taxes on luxury products
and lowering VAT on basic goods that make them unaffordable to the nation’s
Yesh Atid’s Yaakov Peri, a former CEO of Cellcom and
Mizrahi bank official, agreed on the luxury tax, saying that Mercedes buyers
should pay double the tax rate of Subaru customers. He also said that part of
the problem was a complicated tax structure, which had too many provisions
allowing high-income earners to use loopholes. The tax authorities, including
the National Insurance Institute, should be consolidated under one roof, he
Reuven Agassi, a hi-tech entrepreneur running with Am Shalem, said
“the writing is on the wall” on tax hikes, but that he was more concerned about
whether his taxes were being spent on growing the economy. In particular, he
said, labor-force participation from the Arab and haredi sectors was
Sheetrit wholeheartedly agreed, saying that the nation was
spending inordinate amounts on subsidizing people who do not work, namely
haredim who are paid to study at yeshivas.
Although Peri concurred, he
said it would take time to create the infrastructure to integrate those sectors
into the army and national service.
“If they all wake up tomorrow and
decide that they want to serve, we won’t be able to absorb them,” he
Bayit Yehudi’s MK Uri Ariel shot back that the government was
dragging its feet on the issue, saying that above and beyond the “Nahal Haredi
Battalion” (now actually the Netzah Yehuda Battalion and part of the Kfir
Brigade, and not the Nahal Brigade) already in existence, there were three full
battalionsworth of ultra-Orthodox who would be prepared to enlist, if only the
IDF would call them up.
“We don’t need to prepare,” Ariel said, in a
reference to Peri’s five-year integration plan. “There’s already been 12 years
Braverman and Peri agreed on a series of issues. Both
said there was plenty of fat to trim in the defense budget.
“We need Iron
Dome [the antirocket defense system], we need to fight the Iranians, but there’s
room for cuts,” Braverman said.
They also both emphasized the importance
of extending credit to small- and medium-sized businesses.
small businesses are closing within two years of opening,” Peri said
Chaim Cohen, the CEO of Dun and Bradstreet Israel, which
cosponsored the conference, urged the government to focus on cutting red tape to
help the country’s 350,000 small and medium businesses thrive.
the damage control strategy of the prime minister and Finance Minister Yuval
Steinitz, Finance Committee chairman Carmel Shama-Hacohen, of the Likud, offered
few suggestions, but took the position that his party’s political opponents were
exaggerating the economy’s problems and ignoring its significant
“You won’t find any black paint at Home Center,” he chided,
because all the politicians had bought it to paint a dark picture of the
The panel’s moderator, Globes editor Hagai Golan, responded
right back that the politicians had no choice because the ruling party had
already bought out all the rose-colored paint.