Exactly four years ago, Jordan and I went on our first date. Over time, we fell in love, got married and settled in Rishon LeZion. We like to think of ourselves as a sweet and special couple.
And not only us, the IRS loves us very much! Since we are both self-employed and salaried, the Income Tax treats us to thousands of shekels a year with a special benefit, a gift that will accumulate until our retirement to at least two hundred thousand. This gift is called a study fund, and deposits into it, profits and profits are tax-free.
In Israeli politics, it is customary to speak through self-interest. If I'm in the top decile, I'll explain why I deserve a study fund, and if I have children, then why I deserve credit points for raising children, unless I'm in the lowest decile – where my tax is zero, and tax benefits won't help me, so I'll write why I deserve more child allowances.
If I rent, then the rent is high, and I need the state to help me rent an apartment; But if I have an apartment that I rent, then thanks to me and only thanks to me, young people can live in Tel Aviv and deserve tax benefits, and if I have a company that builds rental apartments, then in general, the state should give me billions, because apparently I am a great philanthropist.
The political problem with tax benefits is threefold:
First, everyone who enjoys them uses all their public, media, and political weight to explain to Ms. Cohen from her room why he deserves it. There is not much political power for those who try to preserve the state treasury in favor of Ms. Cohen. Ms. Cohen might put a ballot in the ballot box that goes against her interests, because someone with a bigger, stronger interest has scratched her. Mrs. Cohen, if she belongs to the middle class, pays double the tax because those in the upper deciles enjoy generous tax benefits.
On Sunday, a front page headline in one of the major newspapers said that Finance Minister Smotrich was trying to "rob savings and pensions"; Mrs. Cohen might think Smotrich is going to take her money, put it in the pool and dive into it as if it were Scrooge McDuck in the cartoon
Second, the politicians – and the journalists who are supposed to mediate our economic reality – are misled by those with vested interests. On Sunday, a front page headline in one of the major newspapers said that Finance Minister Smotrich was trying to "rob savings and pensions"; Mrs. Cohen might think Smotrich was going to take her money, put it in the pool and dive into it as if it were Scrooge McDuck in the cartoon. No one will write in favor of the move, even though it is necessary, and all professionals have been talking about it for decades.
The third problem is that when the right decisions are not made because of interest groups, ignorance and regret, it is a move that will increase Mrs. Cohen's net. If the tax benefits do not stop, Ms. Cohen's net worth will continue to decrease.
Deciles 10-9, those with pensions in the millions (mainly budgetary pensions), cronies who own factories and construction companies, will continue to receive tax benefits of NIS 80 billion a year, and Ms. Cohen will pay.
The fashion now is to be against the right thing, to do and to be for the wrong thing.
Just because you're against the government doesn't mean you should oppose a move that's right, and if you're in favor, it's no reason to support a bad move (like abolishing agricultural reform, for example). The tax benefits are the big robbery, not the attempt to end it.
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