The Israeli tax myth
As opposed to what most Israelis think, taxes here are not that high
At times, we need to stop and rethink everything. Our entire history is made up of people who were sure they knew the truth, yet forgot that the truth has an annoying tendency to change on occasion without us noticing it.
After all, only six years ago, President George W. Bush declared total victory in Iraq; five years ago, Ariel Sharon declared that Gush Katif will never be evacuated; only two years ago, we were sure that pure capitalism won and America's economy will continue to flourish; only a year ago, most experts explained that the US will never have a black president; only two months ago, it was clear that Netanyahu will never recognize the two-state vision.
This week, I will try to reexamine some truths that appear clear and self-evident to us. This is not exact science, but it is an opportunity to take another look at some things that looks obvious, even though they are not.
Cliché #4: Taxes in are the highest in the world
Well, they really aren’t.
Yes, I know that it seems that they’re killing us – but what can you do, the facts tell a whole different story. In Sweden, for example, the income tax rate can reach up to 55%, and in Denmark it’s as high as 60%. Meanwhile, the Value Added Tax across Scandinavia amounts to 25% - these numbers would send all of us to the streets in a collective feat of anger.
In fact, the highest tax bracket around here, 46%, puts us at 13th spot among OECD states – which is about midway down the European rankings, below northern Europe, France, Holland, and many other countries.
Compared to the Americans, meanwhile, life here is great. The tax on interest in the US is 50%, while here it’s 20%. The tax on capital gains in the US is 50%, while in it’s 20%. The rent income tax rate in America is 50%, while in it’s 10%.
Moreover, as opposed to America, here in we do not have an inheritance tax, we do not pay a gift tax, and we have no state tax. Also, let’s keep in mind that in the US there is no such thing as universal health insurance, a fact that eats up another considerable chunk of one’s income over there. Those poor Americans; how do they make ends meet?
Actually, considering the fact that our defense budget constitutes 16.4% of our national expenditure – the highest rate in the world – and that another 31.7% of our national budget goes towards paying past debts, it’s truly a wonder that we pay so little tax.
So why do we feel like we are being screwed up? Perhaps it’s because the service offered to us by the State for our money is so terrible; but perhaps it’s because this is just the way we are.
