PM promises free education for ages 3-4 this year

Top income bracket will see tax hike as first stage of Trajtenberg recommendations is implemented.

By NADAV SHEMER
January 1, 2012 20:43
2 minute read.
PM Netanyahu at cabinet meeting

Netanyahu at cabinet meeting 311. (photo credit: Emile Solomon / Pool / Haaretz)

Prime Minister Binyamin Netanyahu said at the start of the weekly meeting Sunday that the government would implement free education for children aged 3-4 in time for the school year starting September – refuting media reports that he would abandon the measure.

According to the reports, Netanyahu was planning to call off multi-billion shekel cuts to the defense budget, a move that would put at risk the recommendations made by the Trajtenberg Report to introduce free education for children aged 3-4, and after-hours education care for children aged 3-9.

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Netanyahu said at the cabinet meeting that he would submit a proposal this week on what he believes is the proper balance between security needs, economic needs and social needs.

Taxation reforms recommended by the Trajtenberg Report and approved by the Knesset in December came into effect Sunday, meaning an estimated 280,000 working fathers of children up to age three will now receive monthly tax credits of NIS 430 each month, while around 100,000 working mothers of children up to age five will receive monthly tax credits of NIS 215.

Taxation becomes the first of the Trajtenberg Report’s four chapters to be implemented.

The report, which the government commissioned in response to last summer’s wave of public protests over the cost of living, also recommended reforms in housing, competition and social services.

As part of the changes to direct and indirect taxation, the highest tax rate for monthly income exceeding NIS 40,231 rises from 44 percent to 48%, while a flat 2% high-earners tax will be imposed on all yearly income exceeding NIS 1 million. The company tax rises from 24% to 25% and the capital gains tax rises from 20% to 25%.

Customs duties were removed Sunday on hundreds of items not produced in Israel, such as toys and electronic equipment.

Also Sunday, the cabinet approved roughly NIS 224m.

worth of economic benefits for Sderot and the area adjacent to the Gaza Strip for 2012. Residents will receive a 20% tax credit, and property tax will be discounted by 30% for residences and 24% for businesses, industry and services.

NIS 13m. will be allocated to local authorities for special security-related expenditures, NIS 8m. will be allocated to five psych-social support centers, NIS 6.5m. will be allocated for daycare subsidies and assistance for emergency medical services will increase.


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