Israel wants its brightest to stay but war, government policies push some away, expert says

Finance expert Simon Monk says that although many Israelis have recently sought opportunities abroad, they often find little difference in spending habits

A record-breaking number of Israeli citizens left the country in 2024. Of the 82,700 who have left, only 23,800 returned. Some cited security concerns and the high cost of living as reasons for their decision to leave. Meanwhile, others have decided to move to Israel and build their lives here.
With so many deciding to emigrate from Israel and pursue what they perceive as better options in Europe and the U.S., the question remains how this has affected the Israeli economy?
Israelis are leaving
(Video: Yaron Brener)
"Bright, intelligent people leaving a country is never a good thing. Let's be quite honest about that. You want bright, intelligent people to stay in the country, work here, earn money here, pay tax here,” Simon Monk, head of business development at Hyposwiss Private Bank Geneve’s Israeli branch told Ynet.
“This is a given. But unfortunately, it's not always the case. We are a free market, democratic country, which means you are able to leave the country and come back. So can you reduce taxes? Can you increase the desire of people to stay and pay less taxes? Ideally, yes.
“There is always a situation where if you raise taxes up past a certain point, a number of people will decide to leave the country. The beauty of Israel is that I think the vast majority of people are living here for an ideological reason. This is the Jewish state. They wish to stay in Israel. They wish to build the Jewish state. They wish to wish to bring their children up here. And that I think counters to a degree the difference in taxation policies.
“Let's not kid ourselves. If you look around the world, antisemitism has grown exponentially. If you are scared to leave the house, if your children are potentially attacked on their way to school, if there have to be security guards outside the synagogue and the schools, maybe that's a price that you do not want to pay, however much money you are making. There is always a trade-off.”

'The cost of housing to live in any major city in Europe is extremely high'

When asked if an Israeli couple earning an average salary would live better in Europe compared to Israel, Monk answered yes in some aspects, but not in others.
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עומס בנתב"ג
עומס בנתב"ג
Queues at David Ben Gurion Airport
(Photo: Shmulik Davidpur)
“On the one hand, when we've been in Europe we've seen certain products are dramatically cheaper, whether it's food, clothing, etc. But I can assure you that the cost of housing to live in any major city in Europe is extremely high. It's not like the prices in London or Paris and Berlin are cheap and you can go and get a home for a small amount of money.
“Yes, if you want to go and live in New Mexico or Arizona there are places that are cheaper. In Lisbon for example, which was obviously cheaper than London or Paris, the influx of people taking the new tax breaks there has dramatically increased the property prices and the locals are complaining. So it's not like it's cheap.”
Monk also addressed the differences in taxes between Israel and Europe, saying, “What we've noticed in Europe is that the situation of most of the countries in their stress on their budgets, you're seeing it in the UK, France and Germany. In London, taxes have been dramatically increased.”
“Whilst they've not hit income taxes per se, they have dramatically increased the costs for employing new workers and they have increased capital gains charges and they have reduced the tax benefits on newcomers coming to the country.”
When asked why the difference in taxes was so significant between Israel and Europe, Monk explained that “when you're in a war economy that we are in and you need to spend money on armed services for obvious reasons, there is a focus on defense spending. Whilst that can be beneficial economically for the defense companies, it does mean that we need more money and we need more money now.”
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שקל דולר ואירו
שקל דולר ואירו
(Photo: Shutterstock)
“There is a more imminent increase in changes to taxation. We've seen an increase in VAT, for example. These things are immediate and they hit straight away. Sometimes in another country, they may take a more planned view. One of the increases in the UK, for example, they put pensions back into the inheritance tax basket, but it's only starting in two years’ time.”

'A question of ideology'

When asked whether the government’s economic policies amid the war had contributed to Israelis leaving the country, Monk said, “Certain things have to be done for the good of the state to win a war. So that means certain rules that otherwise might be adopted are thrown out the window. We need to deal with the immediate. And this is a life and death situation that we know.”
“Do I think people have left the country only because of the war? No. Some people will have left the country. I've certainly heard of cases where foreign corporations turn around to some of the workers here and say, ‘You know what? Come and live in California.’ There has been a certain degree of people who've been leaving the country taking up positions. Most of the people I know that have left.
“Some of these people have been offered new positions and again the people I've seen through my job are people who have high earning potential. They've not moved for 2000 shekels a month more. They've been offered some significant packages which can dramatically increase their wealth.”
“We understand we're a small country, even in the best of times. If someone offers you a two- or three-million-dollar package that you're not being offered here, you are going to go in most cases. Then it becomes a question of ideology. Do you see your future here? Do you wish to stay here and bring your kids up here?"
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דגל ישראל מונף ברצועת עזה
דגל ישראל מונף ברצועת עזה
Israeli flag
(Photo: IDF Spokesperson's Unit)
“What I'm seeing is that whilst some people do go for a period, I'm also seeing a lot of Israelis, particularly from Europe, come back after they've made money and then they bring the money back with them. If you go to the United States and you want to send your kids to a Jewish school, we're talking tens of thousands of dollars. This is not a cheap option.”
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“I've seen in many cases that people go, make money and then come back. Does the government have a role to play? Of course it does. Like most countries in the world, Israel offers a 10-year tax break for new immigrants. And that's not something they should do away with under any circumstances, because Portugal, Spain, Cyprus, Switzerland, even the UK still offer breaks to get bright, smart, intelligent people into their countries because they create wealth.”
“Clearly that's what we're doing. I can assure you there has been a dramatic increase in the number of young professional couples making aliyah from English-speaking countries. These are fantastic Olim. They're all highly educated doctors, lawyers and accountants. Yes, there has been a partial ‘brain drain’ but I believe it has been at least offset by the quality of these young professionals,” Monk concluded.
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