Lapid’s Tax Break: Not For The Average Israeli


The tax relief promised by Finance Minister Yair Lapid earlier this week will only benefit about 10 percent of employees, or just 300,000 people, who earn more than 19,000 shekels a month, while leaving in place a raft of other taxes and spending cuts that are already driving tens of thousands under the poverty line.

“Lapid omitted some numbers from his great announcement about the cancellation of the income tax hike. The numbers clearly show why there is no need to celebrate,” wrote columnist Eli Tsipori in Globes on Wednesday.

The 52.3 percent of individuals in Israel who earn less than the income tax threshold — 1.7 million individuals — will be unaffected by the decision. The austerity measure which was canceled would not have affected them in any case.

The 21 percent of employees earning up to twice the average salary — between NIS 9,400 and NIS 19,000 a month — can expect an increase in their net income of between a few dozen shekels and NIS 200 at the most from Lapid’s measure.

This small amount is not likely to encourage consumption and economic growth to any significant extent, Tsipori says.

Meanwhile, Lapid admitted on Army Radio in an interview on Tuesday that as an inexperienced minister he made “many mistakes, because I simply didn’t know.”

“There are all sorts of conspiracy theories…there’s always room for improvement in the government, and that’s what we’ve done,” though he acknowledged that economic conditions are still difficult, and “we haven’t done enough” to ease them.

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