Israel's purchasing power eroding
Demands: At least three years between cooling period for government officials before working in the private sector, a new 60% tax bracket for annual income over NIS 1 million, and raising the company tax by 4%.
Last week, the protest leaders revealed their list of demands for repairing Israeli society. The document included only general guidelines, and spoke about changes to the biennial budget, changes to the 2012 budget, cancelling total expenditure and the Economic Arrangements Law.
"Globes" has obtained a copy of the detailed list of demands from the forum of 25 social organizations appointed by the social protest leaders. The protest leaders intend to unveil the detailed list of demands to the public tonight on a website set up for this purpose.
In this detailed document, the protest leadership is calling for change in overall budget policy, taxation, and real estate.
A few of the items may shake up the economic status quo in Israel. Protest leaders want to break the connection between money and power by applying a cooling off period of at least three years between employment in economic ministries and work in a private company. They also want to strengthen the Antitrust Authority and empower the Israel Securities Authority to prevent "pyramids of control" and limit cross-holdings.
The protest leaders are demanding a number of tax changes:
- Raising the company tax by 4%, where differential tax rates will be analyzed by the following factors: size of the business, exports and location (if in the periphery).
- Cancellation of the health tax and National Insurance levy cap, to make them more progressive and bear the public health and welfare burden in Israel.
- Equalize royalties from all of Israel's natural resources with the royalties set for the gas and oil sectors by establishing a natural resources fund, which will be used solely for social purposes, and only during that fiscal year.
- Establish a new 60% income tax bracket for annual income over NIS 1 million,
- Apply a progressive inheritance tax and a gift tax, with a threshold tax bracket of 10% for an inheritance or a gift valued over NIS 3 million, or NIS 6 million per couple.
Yesterday Prime Minister Benjamin Netanyahu spoke about the social protest, saying: "We are not neglecting neither as a result of our security responsibility nor of our economic responsibility anything regarding our responsibility to implement social reform in the State of Israel. We are doing this. The Trajtenberg Committee is working with all due urgency. It will submit its recommendations to us next month. This is a very serious committee and we are talking about serious and responsible steps. These will not be small steps, but major ones and will be submitted to the Socio-Economic Cabinet in the coming weeks. Ours is a genuine commitment to social reform and the reform we are talking about is both genuine and serious."
Netanyahu also called the agreement signed between the Ministry of Finance and the Israel Medical Association, "revolutionary."
Published by Globes [online], Israel business news - www.globes-online.com - on August 29, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011
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