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In spite of all the recommendations, Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz are standing firm: Taxes will be cut as planned on January 1, they say.

Corporate taxes will fall from 26% to 25%, while the highest-income tax bracket will be reduced from 46% to 45%, in keeping with the tax reform launched in 2006.

Advisors and top treasury officials have been pressuring Steinitz to forgo this step of the multi-year plan, arguing that it will damage precarious tax earnings. Taxes are being raised around the world, they note, and the government would do better to pay off debt and reduce its debt-to-GDP ratio. In addition, international agencies including the International Monetary Fund, the OECD and the major credit-rating companies have also voiced opposition to the move.

Steinitz and Netanyahu have rejected the pressure. They consider cutting taxes an ideological matter, and intend to make good on their promises to voters.

However, taxpayers may not actually see any more money in 2010, because the ceiling for National Insurance payments has been increased.