The much anticipated economic plan of the new Netanyahu government was announced today, with tax cuts and privatization taking a leading role. While the plan calls for promoting jobs and halting unemployment, the cornerstone of the plan is tax policy and structural reform.
Netanyahu laid down the gauntlet by saying that by lowering taxes, Israel will become of of the world’s most attractive investment destinations. As the rest of the world is marching towards socialism, Israel appears to be headed in the other direction, embracing free market principals that have led the world to unseen prosperity over the last 28 years.
According to Globes: “Netanyahu and Steinitz also announced decisions on the structure of tax cuts between 2009 and 2016, which focuses on the middle class. Netanyahu said, “The middle class bears the heaviest burden, and as a complementary measure, we’ll promote the abolishing of exemptions and improve collection. Excellent people are working there, but it’s no secret that the institution has been traumatized.”
Netanyahu’s tax plan calls for reducing the company tax rate to 18% by 2016 and reducing the maximum income tax rate for individuals to 39%.
Netanyahu added, “The individual tax rate will fall in 2010. We must distinguish ourselves from the world, so that everyone sees that we’re the most attractive. We’ll we’ll attract entrepreneurs and capital because the company tax will fall.”
Let’s see if once again Netanyahu’s policies can save the Israeli economy from the abyss, and be seen as a model worldwide, that lower taxes, privatization and individual land ownership are the cornerstones to real economic growth; and not by government printing presses working 24/7. to artificially stimulate the economy while bankrupting future generations.
C’mon now Bibi. Don’t get cold feet. In a press briefing the newly crowned PM said that taxes may be slashed but not neccessarily this year.
According to Globes:”Netanyahu and Steinitz were asked whether tax rates would fall this year. Netanyahu declined to commit, saying, “You’ll hear about tax reform this year, but that doesn’t mean that taxes will fall this year.” Netanyahu stressed the importance of adopting a “strategy of a small country”, which he said could make rapid changes. He supported the idea of tax cuts, but refused to commit to a timetable.”
Let’s get those tax cuts now, so we can jump start the economy.
Labor party members voted to join the Benjamin Netanyahu led government, in what was a spirited vote that may end up splitting the Labor party.
According to a Jpost.com report: “1,071 party members attended the convention, with 58 percent voting in favor of joining the
government and 42% voting against it - a margin of 173 votes. Prime Minister-designate Binyamin Netanyahu called Barak to congratulate him on the vote’s outcome, while Infrastructures Minister Binyamin Ben-Eliezer said he and Barak were grateful to those Labor members who supported the move to join the coalition.”
This move helps Netanyahu form a more stable and more centrist government. The question remains to be seen, how Liked members will like this move? Also, will having a social-democratic economic party in the coalition limit Netanyahu’s plan to cut taxes?
With the whole world moving quickly towards socialism, and with government printing presses working 24/7 in order to help print enough money to keep up with all the spending, in Israel the opposite is about to take place. The victory of Benjamin Netanyahu will usher in an era of tax cuts, and less government intervention in the daily lives of citizens, allowing the free market to work as it should.
We will actually have a real life ‘Battle of economic philosophies.’ keep in mind that the US entered economic Armageddon a full year and a half before Israel did, so first in first out may apply here, but we may get a real feel on which economic system works better.
According to a Bloomberg report:”There will be a certain amount of deterioration before we can turn around the economy’s direction,” Netanyahu said Feb. 23 at a meeting of Likud lawmakers. “We face an economic crisis that we haven’t seen in many years.”Netanyahu, 59, has vowed to lower Israeli taxes as he did as finance minister. He also promised during the campaign to liberalize the real-estate market, saying the Israel Land Administration’s near-monopoly inflates housing costs.”
If I was a betting man, I’d take the Netanyahu tax cutting and privatization plan heads down over Obama’s tax hikes, and nationalization of industry.
Netanyahu always said tiny Israel would become one of the world’s richest nations. Everyone used to scoff. now if tax cuts boost economic activity, Israel will truly turn into a ‘ light unto the nations.’
