At the same time, the lower limit for fourth bracket payers drops from NIS 21,800 to NIS 20,000 a month. Israelis earning over NIS 20,000 monthly (about $60,000 annually) pay one-third of their income in taxes. Others earning multiples more find clever ways to pay less.
With high food, housing, medical and other expenses, ordinary households struggle to get by. Street protests express rage. Instead of help, policy measures enacted make things harder. Higher taxes alone strain family budgets.
Across-the-board 5% cuts in most ministries are affected. New priorities were claimed. They include halting cross-border migration, combatting tax evasion, upgrading firefighting capability, and improving civil defense preparedness.
Israel calls it the Home Front Command. In America, it's Homeland Security. Others call it the national Gestapo. How it operates explains why. Israel replicates its harshness. Perhaps tougher tactics are planned.
After passage, Netanyahu claimed:
"We have approved steps to prevent us from entering into a huge deficit in an attempt to protect the Israeli economy and the jobs of Israeli citizens."
"These steps are responsible for protecting the Israeli economy from the global economic crisis."
Knesset members were called back from summer recess to address two government-sponsored bills. One involved tax hikes and budget cuts discussed above.
The other gives transnational corporations huge tax breaks. Earlier rules meant keeping profits in Israel. Now they can do what they wish after paying minimal taxes.
Privileged segments of society needing least or no help benefit most. Others bear the burden. It works the same way in America and other Western societies.
Israel's corporate generosity remains effective for one year. Expect renewal on expiration. Benefits include lower tax rates and avoiding them entirely on dividends called "trapped profits."
One final hurdle remains. The measure first goes to Knesset Finance Committee members for approval. Second and third full body readings follow before becoming law.
Expect little opposition. Nonetheless, Labor Party chairwoman Shelly Yacimovich called corporate tax cuts "unconstitutional and illegal." For sure they're unfair.
"Will the prime minister collect the tens of billions that ought to be collected by law, or will he place another tax on the weak sectors," she asked?
Meretz Party chairwoman Zahava Gal-On also objected. She called the bill "robbery in broad daylight." It changes the rules of the game and "redefines the concept of equality and justice."