Growth is good, but not good enough
The economists state that better public services can be funded by raising direct taxes, including the company tax and capital market taxes.
The tent protesters have won support from some of Israel's top economists including Prof. Joseph Zeira of Hebrew University. Today, a group of economists published an opinion in which they say that the protest is strongly justified. Signatories include Zeira, former Bank of Israel deputy governor Avia Spivak, and former Ministry of Finance director general Avi Ben-Bassat.
The opinion's authors want to counter opponents of the protest, who claim that improving public services will weaken Israel's economic standing. The economists state that better public services can be funded by raising direct taxes, especially on the wealthy, as well as raising the company tax and capital market taxes. "Such a policy does not harm economic growth as the experience from Israel and other countries demonstrates," state the opinion piece.
Two days ago, Ben-Bassat turned down a request by Prof. Manuel Trajtenberg to join Prime Minister Benjamin Netanyahu's Rothschild team, which he heading. Officially, Ben-Basset said that his work load preventing him from participating in the team, but sources close to the team say that it was expected that he would criticize the team from outside.
"Two years ago, I headed a team at the Caesarea Conference, which discussed the proper level of government involvement in the economy," said Zeira. "We concluded that this was not an economic question, but a political-social-value question. In the past, the government presented the reduction in the number of ministers as an economic imperative, not as an ideology. Our report showed that this was not a necessity, but a choice. That is why there was room to object to the choice and present a more equitable and just alternative.
"The main point was that formulating social-economic policy is not solely an economics matter. Economics can help on the technical side, but the main trends must be discussed in an open public forum. If the public wants to increase government involvement and the social services that it provides, and is prepared to finance this through higher taxes, it is the government's duty to decide to do so."
Published by Globes [online], Israel business news - www.globes-online.com - on August 10, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011
You comment was recieved and soon will be published.
Thank you for posting your comment, which will be reviewed for publication.
Load more comments
BlackRock Managing Director Stephen Cohen spoke at the "Globes"-BDO Ziv Haft Capital Market Conference.
Israel 11th in Bloomberg Gas Price Ranking
Israel is just below Finland in the ranking, and above Hong Kong and Britain.
Andorn: No tax hike to increase defense budget
The Finance Ministry director said more money should go to civilian services.
Tax Authority targets big spenders
Under suspicion are those who make frequent overseas trips, and unusually large capital market transactions.
Patrick Drahi ousts Eyal Ofer as richest Israeli
"Forbes Israel": Israel's 100 richest people's wealth equals 850,000 ordinary Israelis.
Police: Indict Olmert, Tel-Zur for obstructing justice
The police say Ehud Olmert and lawyer Navot Tel-Zur attempted to dissuade Shula Zaken from testifying.
Treasury forecasts just 3.1% growth in 2015
The IMF and OECD see 3.4% and 3.5% growth respectively in 2015.
TA Art Museum, Russia's Hermitage to collaborate
The announcement reflects the Tel Aviv Museum of Art's standing in the art world.
Lapid: I've learned economics at the people's expense
"A finance minister does not have to be an economist, but must know priorities."
Unemployment still falling
Israel's 5.6% unemployment rate in April is one of the lowest in the OECD.
C'tee calls for limiting cash deals to NIS 7,500
The Locker committee recommends a series of restrictions on the use of cash and checks.
Shekel strengthens as rate decision awaited
Analysts are split over whether the Bank of Israel will announce a rate cut today.
Analysts split on June interest rate decision
Even analysts who see the rate unchanged believe that it will be cut in a few months.
High Court bans yeshiva student stipends
The High Court of Justice: Yeshiva stipends discriminate against university students.
Teddy Sagi in talks to buy English football club - report
"The Reading Post": Teddy Sagi is in talks to acquire Championship side Reading.
Fitch affirms Israel's rating
The outlook for the 'A' long-term foreign currency rating is positive.
Change Israeli education from the ground up
Governments cannot reform our education system without a change in perceptions.
"You can't teach entrepreneurship"
Angel investor Zohar Gilon relies on his own judgement rather than due diligence when selecting investments.
If Rose Fostanes played basketball
Reforms in regulations for foreign caregivers are welcome, but don't go far enough.
Antitrust Authority disappoints on gas competition
The only new company that will compete against Tamar and Leviathan will own less than 8% of Israel's proven gas reserves.
When innovation means a refrigerator
Jamshyd Godrej believes economic development in India must go hand in hand with environmental and social awareness.
Prof. Zvi Eckstein supports NIS 3.30-3.40/$ floor rate
The former deputy Bank of Israel Governor is the first senior figure from the financial system to advocate a floor rate.
2013 boom year for Israeli high-tech
In the first half of the year, there was a 52% rise in demand for mobile and web developers, and salaries are up as well.
Strong shekel forces Israeli manufacturers abroad
Israeli manufacturers tell "Globes" they are losing money due to the current strength of the shekel.
"Ending QE3 will harm the economy"
Prof. Richard Clarida will tell "Globes" Israel Business Conference that the main risk to the US economy is its political system.
Israel offers favorable tax regime for companies
"Globes" and Baker Tilly Israel accountants found Israel's tax benefits are among the most attractive in the West.
Slowdown will worsen
The vested interests that continue to claim that the economy is improving are deceiving the public, says Eyal Horowitz.
Can the US maintain growth after QE3?
Leading economists will discuss "The US: catch 22 the zero interest rate" at the "Globes" 2013 Israel Business Conference.
"The worst could still be ahead in Europe"
Prof. Charles Wyplosz will discuss Eurozone recovery at the Globes Israel Business Conference on December 8-9.
"Let capital pipelines function to full potential"
Amir Bramly argues that limited investment supply is stifling small and medium Israeli companies.