Speaker of the Knesset MK Dalia Itzik is seeking to remove the Ministry of Finance's proposal to levy the health tax on housewives, which is included in the 2008 economics arrangements bill. She told Minister of Finance Ronnie Bar-On that she would not let the proposal pass.
Itzik said, "We're talking about women who don’t stay at home voluntarily, and who haven’t a penny anyway. Levying the health tax on housewives is a financial burden. It is tantamount to double taxation, since they've already lost tax credits. The policy is unclear, it harms the lowest income families, and contradicts the policy to reduce poverty in Israel."
The item was taken off the Knesset Finance Committee agenda yesterday, but the committee might discuss it at Sunday's meeting because it's a bargaining chip in the negotiations to obtain the committee's support for the 2008 budget. Virtually every political party wants to take credit for removing the item from the economics arrangements bill, so the subject may very well come up for debate next week, but is unlikely to win Knesset approval.
One problem with the proposal is the difficulty in defining "housewives". In addition to 440,000 housewives listed in the National Insurance Institute records for longer than one year, there are also 275,000 women with this status for temporary periods during any given year. Finding a way to equitably levy the tax is therefore problematic.
In addition, 70% of housewives are in the bottom half of the population according to National Insurance Institute figures, and levying the health tax on them through their husbands or National Insurance Institute allocations will deal a severe blow to these women. Moreover, the Ministry of Finance's proposal for a negative income tax, which the Knesset yesterday passed in its second and third readings, is actually aimed at helping the poor.
Published by Globes [online], Israel business news - www.globes-online.com - on December 19, 2007
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