What happened? (Illustration)
Photo: Reuters
We used to be socialist
Government introduces steps that increase socioeconomic gaps in Israel
Sometimes we don’t know whether we should cry or laugh. On Wednesday, we were informed that Israel is home to people whose salaries are 100 times higher than other workers – in the same country, in the same city, and sometimes even at the same factory.
However, it appears that government ministries, where ministers claim to be “concerned for the fate of the poor” almost every day, actually think that it would be preferable to increase socioeconomic gaps in Israel during the current financial crisis, which is expected to get worse in the coming months.
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Here is some evidence: While fuel prices for cars have been increasingly lowered in recent weeks, bus fares have gone up. As we know, plant managers and department heads at government ministries and in privately held companies do not ride the bus often. On the other hand, the poor residents in southern communities use buses all the time.
Meanwhile, taxpayers will enjoy a nice salary increase as of January 1st. Why? Because the tax reform will prompt a significant reduction in tax payments, particularly for those who earn tens of thousands of shekels per month. However, about 50% of the population, the ones who earn very little (up to NIS 5,300 a month,) do not pay taxes at all. Hence, they will not be enjoying the reform at all. So what will happen to the net wages of the rich and the poor in Israel? As we noted: Growing gaps.
Yet this isn’t enough apparently. Purchasers of new vehicles will enjoy a 3% sales tax reduction as of January. The poor, as far as we know, are not expected to buy new cars in January. And we almost forgot: Company owners will also enjoy a tax reduction on corporate taxes. Have you ever heard of a poor man who owns a company?
Once upon a time, we used to be a socialist country. Israeli governments made sure to significantly subsidize the prices of bread, dairy products, eggs, sugar, chicken, and even water. What has been left of all this today? Very partial public transportation subsidies, which are not enough to avert the occasional fare hikes, and slight subsidization of the water provided to farmers only.
On the other hand, during these days of financial crisis we are being told that early next year we are expected to see price hikes for basic products that used to be subsidized in the past, as well as the prices of things like electricity, water, municipal taxes, and other payments. These are price hikes which the poor suffer from to a much greater extent than the rich.
So don’t be surprised if in its next report, the Treasury will announce another increase in socioeconomic gaps. Moreover, so far we have not yet heard any of the premiership candidates declaring what he or she will do in order to minimize the growing gaps; Just something for voters to think about.
