Former finance minister Silvan Shalom, the Histadrut Labor Federation and the Manufacturers Association of Israel on Monday attacked the socio-economic reforms presented by the Finance Ministry and accused it of putting sticks into the wheels of their attempts to introduce a negative income tax bill.
"Since the Knesset passed the negative income tax proposal I presented, the Treasury has been throwing sticks into the wheels," said Shalom, during a press conference in Tel Aviv, while in Jerusalem the Finance Minister, Avraham Hirchson, was presenting his new five-point socio-economic program that includes a negative income tax, pension and the car leasing reforms. "Knesset Finance Committee Chairman Yaacov Litzman has been refusing to present our proposal for approval in the committee," Shalom claimed.
Last month, the Knesset plenum passed in a preliminary reading a negative income tax bill, first presented by Shalom, which would pay those workers earning less than NIS 5,000 a month in gross income 30 percent of the difference between their monthly wage and NIS 5,000.
"Fifty-percent of Israeli workers have no income beyond the minimum tax threshold and thus our proposed bill will assist them," Shalom said.
Several ministers were among the 98 MKs who voted in favor of the bill, despite the fact that the official government position was against the bill.
"We are not in competition with the Treasury," said Shalom. "Our aim is to introduce and implement negative income tax in 2007. From what I know about Hirchson's proposed reforms they don't offer an appropriate timetable nor do they provide clear objectives."
Also speaking at the conference, Shraga Brosh, president of the Manufacturers Association, charged that Hirchson's negative income tax program was not serious.
"I would be concerned about proposals that are being realized only in 2009, during which time we know a lot can happen," said Brosh. "The reforms by the Treasury are only headlines and represent an effort to distract attention from the higher use value of company cars reform."
Histadrut Chairman Ofer Eini, meanwhile, emphasized the labor federation's strong support of Shalom's negative income tax bill.
"Silvan Shalom understands what the finance minister did not understand and I am glad to say that there is a strong consensus in the Knesset for Shalom's bill," said Eini.
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