54% of Israelis' income goes to the government, states a report by the Jerusalem Institute for Market Studies (JIMS). It states that the average Israeli works until July 14 to pay his tax burden, and only afterwards begins earning a living or saving money from his disposable income. JIMS sets July 14 as "tax independence day".
JIMS states that the precise date of each year's "tax independence day" is calculated using a prevailing model that in which total state and local taxes are divided by net national income. The figure is divided by 365 to determine the "tax independence day" for that year.
JIMS says that Israel's "tax independence day" is the latest of developed countries. For the sake of comparison, in the US, people pay 27.5% of their income in taxes. By all signs, in 2014, Israeli taxpayers will reach "tax independence day" in late July, or even in August, unless there is rapid economic in the coming months.
JIMS executive director Corinne Sauer, who headed the study, said that the model clearly reveals Israel's tax burden. "Tax independence day is an opportunity to clearly demonstrate the extent that the state must undergo serious fiscal reform. It is true that taxes are a necessity in a developed society, but when 54% of our average salary goes to the government, it means that the system is thoroughly flawed."
Published by Globes [online], Israel business news - www.globes-online.com - on July 10, 2013
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