Hirchson pushing ahead with car usage, negative income tax reforms

This will bring about an increase in available income for citizens and increase participation in the work force.

January 25, 2007 12:06
1 minute read.
hirchson podium 88 298

hirchson podium 88 298. (photo credit: Ariel Jerozolimski)

Finance Minister Avraham Hirchson said Wednesday he is proceeding with plans to reform the tax situation regarding corporate car perks as well as a proposal to implement a negative income tax reforms, which he claims would bring about an increase in available income for citizens and increase participation in the work force. "I will soon make a decision over the issue of the company car usage value," Hirchson announced at the Seventh Herzliya Conference at the Daniel Hotel on Wednesday. "This is an important social reform, which will bring about the increase of available income to every citizen." Hirchson contended that leased cars were an undervalued benefit given to employees by their employers. "The distortion that was created in the Israeli economy so only 10 percent of workers benefit from the improvement that cost NIS 2.5 billion, is not just in my eyes," he said. "We will strive to fix this distortion in order to return the monies mentioned to all Israel's citizens and especially to the middle class." Hirchson, at the end of last year, appointed a committee to examine the value of company cars leased by employees in response to a proposal by tax authorities within the Ministry of Finance to raise the assessed value of leased cars. By raising the value of the cars, authorities will be able to collect a higher tax from those employees, taking advantage of this popular company perk. In addition, Hirchson reaffirmed his intention to implement a negative income tax plan, which was now in the final stages for presentation to the government. "I chose negative income tax from the understanding that the war on poverty will succeed only when participation in the work force is significantly increased," said Hirchson. "This is not a simple step, its budgetary cost is high, it obligates tens, even hundreds, of thousands of citizens, but I believe it is just and correct." Furthermore Hirchson announced that in the course of the year 2007 he will present to the government, together with businessmen and academics, a strategic plan that would outline the way and clear goals for the economic and social future of Israel for the next 10 years. "We will continue to strive for social reforms and reforms that understand the market in general and specifically also the energy and water markets," said Hirchson.

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