For many Israelis, these decisions mark another blow in an already frustrating socioeconomic reality. Steinitz, meanwhile, defended the measures.
In an interview with Channel 2 News, he said that "We are protecting Israel from the worst global economic crisis since its establishment.
"Israel is one of the few countries in the West whose credit rating has not been lowered," he boasted.
When asked if further economic measures would be taken, Steinitz said that he hoped such steps would not be required.
The minister further said that "Israel will receive billions from the foreign companies operating in the country."
The planned tax hikes and spending cuts announced by the Finance Ministry last week include raising the income tax by 1% for individuals who earn between NIS 8,801($2,180) and NIS 67,000 ($16,566) per month.
It has also been tentatively decided to impose a 2% surtax on annual revenues over NIS 8,801 which include salaries, capital gains and rent profits.
The government is further considering taxing employers at a 0.5%-0.8% rate.
The decision to raise the income tax will take effect starting January 1, 2013.