The Bottom Line / No, I don't work here
There are two types of people in the state of Israel. The first are the suckers, those that pay income taxes out of their ears on every last shekel they earn. The second group doesn't pay.
There are two types of people in the state of Israel. The first are the suckers, those that pay income taxes out of their ears on every last shekel they earn. The second group doesn't pay. Some of these run to their lawyers who manage to get them exemptions and tax breaks, while others turn their incomes into "donations and gifts," thereby becoming exempt from paying a single farthing to the tax authorities.
Rabbi Elazar Abuhatzeira (Baba Elazar) honed this second system to a fine art. In 1997, a series of articles in Haaretz highlighted some of these doubtful interpretations, which Baba Elazar exploited. Apparently this wise man managed to gather over the years hundreds of millions of shekels from "donations and gifts" and bought himself a not-so-small palace.
At the end of 2002 the State Prosecutor's Office (southern section) decided to close his investigation file, but the tax authorities were not ready to give up, and pursued their investigation in order to recoup some of what Abuhatzeira owed. They sued him for NIS 100 million, but Abuhatzeira claimed that his incomes were "donations and gifts" for which he had given nothing in return, no blessing, no advice, and therefore no labor and therefore no tax is due. The police wrote on the matter: "The rabbi himself, or his representatives, demanded monies from people for solving problems, charity, blessings, all while falsely representing of his true financial position."
The Income Tax Office entered negotiations with Abuhatzeira, and after a year-and-a-half of talking came up with an interesting result: The rabbi will pay NIS 15 million to the office and NIS 5 million to various charities. In response, the Center of Jewish Pluralism sent a letter to Attorney General Elyakim Rubinstein and Income Tax Commissioner Tali Yaron-Eldar, in which it demanded the agreement to transfer NIS 5 million to various non-government bodies be canceled. For who can vouch that these sums won't, in a roundabout fashion, end up back in the same place?
But it is the NIS 15 million that will be paid to the tax office bothers me. Is this the correct tax due on income of hundreds of millions of shekels? The tax office said that it was difficult to prove that the rabbi had given something in return for the money. That sounds quite absurd to me, because no one donates such large sums without expecting something in return; a blessing, a word of advice, a moment with the rabbi, a cup of tea.
But if the tax office is willing to accept this donation approach, then I would recommend to everyone that we turn our income into "gifts" and claim that we only "come to work" but we don't actually work, and therefore we are obviously not paid. We could claim that no one tells us to do anything, and even if someone does say do this or that, we don't listen, so what we do receive from our employer - well, this is simply a donation from the goodness of his heart, and therefore not liable for tax.
Now what a wonderful year that would be for us all, if the Abuhatzeira approach was adopted throughout the land. And to Abuhatzeira we wish him a happy 5764, a year of donations!