Those Israelis whose income places them in Israel's top 20th percentile pay 80% of the taxes that are levied in Israel, according to the yearly report published by the Finance Ministry's State Income Authority Sunday.
In addition, the salary of almost half (47%) of salaried workers in Israel is not high enough to be subject to income tax.
In 2006, the collection of taxes rose by a real rate of 11%.
According to predictions, tax payments for 2008 will total $8.5 billion of which 18% will come from state income tax payments or 5% of the GDP. In 2006, income tax returns from the public amounted to $57 billion – 37% of the GDP in Israel. In 1986, the public tax burden stood at 44% which means that in that last 20 years, it has dropped by 7% of the GDP.
The direct tax reforms have put more weight on the taxes that are paid by those wage earners that are in the top 20th percentile of the Israel economy. In 2002, before the reforms, the top 20% paid 76% of direct taxes compared with 80% in 2006.
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