Taxes for the masses?

A city councilor is proposing that income-based discounts be given only to those who are employed.

Money cash Shekels currency 521 (photo credit: Reuters)
Money cash Shekels currency 521
(photo credit: Reuters)
For many, paying taxes is like visiting the dentist: not particularly fun, maybe even be painful, but necessary. Just like visits to the armchair of terror, some of us try to postpone paying our taxes – to no avail, of course; fines (and root canals) just make things worse. But then there are some for whom paying property taxes (arnona), at least, is not such a terrible thing. Sometimes it’s even painless, for they have found a way to escape the dreadful encounter. Here is their story, and the the story of some of our public representatives who are trying to change this state of affairs.
Abandoned buildings are not only eyesores, it turns out they’re also exempt from arnona. According to City Council member Merav Cohen (Hitorerut B’yerushalayim), there are quite a few cases of owners damaging parts of their own properties on purpose, just to obtain the exemption. For the past two years, Cohen and her friends at Hitorerut have taken it upon themselves to map the city’s abandoned buildings (including lots of shops) and to bring the issue to the council’s attention.
The result was quite astonishing – no fewer than 1,588 such properties have been found (at some point the municipality’s CEO, Yossi Heimann, decided to join the project), translating into a loss to the city’s budget of NIS 30 million. Cohen was particularly shocked to discover that, as per paragraph 330 of the municipal bylaws, the council has no power to change the status of these structures.
The only way to repair the situation was to bring it to the attention of the Trajtenberg Committee, whose decision to change the status of these buildings was accepted earlier this week, within the framework of the government’s vote on the Trajtenberg recommendations on housing issues.
As of now, owners of damaged and abandoned properties will benefit from only six months’ exemption, extendable by an additional three months. Beyond that, the owners will have to join the respectable family of arnona payers, no matter what condition their property is in, and they will have to pay double the regular rate.
BUT THERE’S more to the arnona saga. The arnona rate is fixed by the Interior Ministry and approved by the Knesset. Municipalities have no say regarding the reductions or exemptions the state bestows on residents. For example, the ministry recently issued a new rule stating that as of this year, the threshold for eligibility for an exemption or discount will be lowered.
According to Cohen, so far the ministry’s generosity has cost the city between NIS 33m. and NIS 58m. – the result of discounts or exemptions being awarded to non-profit organizations, rehabilitation organizations, care centers for the elderly, and total exemptions for institutions “dedicated to prayers and religious studies” (the last one alone costing, according to the municipal budget, between NIS 20m. and 30m. per year).
Until now, in Jerusalem, some 40,000 residents benefited from arnona reductions or exemptions based on their income level. From now on, according to Interior Minister Eli Yishai (Shas), these reductions (up to 90%) and exemptions will be extended to include people who earn even a little more than those 40,000 already registered. That would mean, first of all, that the city’s budget would have to be increased, a step Mayor Nir Barkat strongly opposes.
To address this problem, Cohen put forward a proposal, which perhaps unsurprisingly so far hasn’t been approved. According to Cohen, the municipality shouldn’t resist Yishai’s move – on one condition: the beneficiaries of this new extension must prove that they are employed.
It’s as simple as that: a resident who works, meaning that he or she is making a serious effort not to live at the public’s expense, deserves to be supported by a tax reduction. Otherwise, there is no reason why all the good people who do not particularly like paying arnona, just as they don’t like to go to the dentist, should have to support those who can but refuse to make the simple effort to earn a living.
So simple, and yet so troubling, for, as Cohen explained, the reaction from the haredi (ultra-Orthodox) lists’ benches was... not in favor, shall we say.