The pettier the accomplishment, the grander the words. When Finance Minister Silvan Shalom recently teamed up with Bank of Israel Governor David Klein, Manufacturers Association president Oded Tyrah and Histadrut labor federation leader Amir Peretz to talk about the state of the economy, the treasury referred to an all-embracing program that would change the very foundations of the economy.
What we ended up with was a cut in interest rates. When Silvan Shalom presented the latest budget cuts, he called it the greatest economic plan since July 1985, but in the meantime there have been no cuts, and in any case there is no comparison between the planned cutbacks and the hyperinflation-solving plan of 1985.
And now, when the prime minister and the finance minister want to star in positive headlines in the press, they are talking, again, about a tax reform. For this, Shalom is to appoint a new committee, as if we are short of such committees. As if the Ben Bassat recommendations never saw the light of day, as if we couldn't just implement those recommendations with the necessary amendments.
If Shalom would only open his drawer, he would find a fresh document from the Income Tax Authority that recommends various ways of increasing state revenues from tax collection: the closing of 20 current legal loopholes. But who does Shalom have advising him on these loopholes? Yair Rabinowitz, Avi Alter and Moshe Drucker (apparently frontrunners for this new tax committee), whose work comprises advising rich business people on how to use the tax loopholes to their advantage.
In order to justify the appointment of this superfluous committee, they say that these recommendations will be "without an inheritance tax." So what's new? Former finance minister Avraham Shochat already gave up on such a tax due to lobbying pressures. Shochat was also forced to drop his plans to cancel the breaks that the "strong" workers get, such as reduced taxes on shift work and tax exemptions on advanced training funds (keren hishtalmut).
Yair Rabinowitz has already stopped describing a tax on the stock exchange as "not that simple." But there is nothing to fear there. He wouldn't dream of imposing such a tax, because the people he represents hate such a tax and because Shalom is against.
There is clearly no need for a new committee, as the tax authority could simply activate the Ben Bassat recommendations which were prepared for their first reading in the Knesset. What stopped their passage back in September 2000 was the unholy alliance between Amir Peretz and Eli Yishai of Shas. Shas demanded that in order to pass the reforms, Shochat would have to bail out its education network for the NIS 30 million it owed in taxes. Shochat refused.
Peretz, who together with Shas introduced a whole series of populist laws, will be remembered in the annals of history as the only labor leader who ever prevented the introduction of a capital gains tax through the reforms.
For its part, the Likud will be remembered as a cynical body that cares not at all for the good of the state, and everything for power. When Shochat, back then, tried to convince them to support the watered down tax reforms, Reuven Rivlin, Limor Livnat, Meir Sheetrit and Silvan Shalom replied that they would not be the Barak government's helpmeet. They wanted to "ditch the government," but they really "ditched the state."
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