Analysis |

Rich Israelis Can Breathe Easy: Major Parties Won’t Touch Them

A review of the economic platforms of Israel’s largest political parties running for the Knesset shows that they all ignore socioeconomic reforms like inheritance taxes or climate change

Eytan Avriel
Eytan Avriel
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Bennet and Lapid share a rare embrace.
Bennet and Lapid share a rare embrace. Credit: Emil Salman
Eytan Avriel
Eytan Avriel

We asked various parties about their economic platform ahead of the March 23 Knesset election. The answers indicate there is barely any difference between them. The vast majority of parties and legislators, especially the ones that will lead the next government in any possible scenario, support the neoliberal policies that have characterized Israel over the past decade, if not a more conservative version.

How is this possible? Why does no major party offer an alternative – in contrast to nearly every other democracy, including countries that are more capitalist or neoliberal than Israel? It seems obvious that this situation is a vacuum waiting to be filled.

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Why, for example, is there no party calling for an inheritance tax and for raising taxes on the wealthy? Why is there no green party, that sees reality through the eyes of the young, including issues related to the climate crisis relations between corporations and the public and the intergenerational distribution of resources?

Even in the United States, the country that invented neoliberalism and has implemented the capitalist vision in its most extreme version, a president promising to raise taxes on people with incomes of over $400,000 a year and to invest enormous resources in a “green new deal” meant to cope with climate change was elected three months ago.

Politicians like Bernie Sanders, Elizabeth Warren and Alexandra Ocasio-Cortez are pushing President Joe Biden to do more on everything related to inequality, student debt, the minimum wage and the power of big business.

One man, Benjamin Netanyahu, has controlled the party that has ruled Israel for the past decade. It’s no secret that the prime minister has a conservative Republican outlook. He openly discusses it. He supports small government, privatization, low taxes and deregulation – which means more power for big business.

Recently, in a rather odd video he posted on TikTok, Netanyahu enters the office of a pediatrician belonging to one of Israel’s nonprofit health care providers. He says he cannot write a prescription because he’s not a doctor, but he can recommend a book that promotes neoliberal policies.

A screenshot from the Tiktok where Netanyahu is seen spruiking a book about neo-liberal policies. Credit: Benjamin Netanyahu's Tiktok account

Netanyahu’s policies can be evaluated on the ground. His greatest involvement in the economy in recent years was the royalties deal reached with natural gas providers, Israel’s largest and most powerful monopoly. Netanyahu ousted cabinet members, the head of the Israel Competition Authority and the chairman of the Electricity Authority on its behalf.

The Israel Competition Authority has been greatly weakened during his time in office, approving mergers that undermine competition and failing to promote any pro-competition reforms. Only after pressure did Netanyahu approve, or at least refrain from opposing, initiatives like raising the minimum wage.

Netanyahu even declared that he wanted to dismantle the unions and professional associations. We learned of his love for billionaires through his criminal cases: Arnon Milchan and James Packer (Case 1000), Sheldon Adelson (Case 2000) and Shaul Elovitch (Case 4000).

Sa’ar: Netanyahu’s double

Netanyahu’s rivals don’t offer a social or economic alternative. Gideon Sa’ar, the new star of the next election, holds identical economic positions. He, too, loves and is close to tycoons, as we learned last week when it was revealed that businessman Alfred Akirov put up guarantees worth 5 million shekels ($1.5 million) on his behalf.

The economic platform of Sa’ar’s New Hope party doesn’t offer an alternative to Netanyahu, and it certainly is not progressive in that regard. It’s a version of everything the Finance Ministry has talked about for years but simply hasn’t yet implemented.

Gideon Sa'ar at Hadassah Ein Kerem Hospital, Jerusalem in December 2020.Credit: Ohad Zwigenberg

The numbers Sa’ar promises – 23% growth over five years, 35% more in annual infrastructure spending and doubling the number of high-tech employees – are mostly reminiscent of Netanyahu’s promise to make Israel a member of the club of 15 leading nations in per capital gross domestic product. Israel remains in 21st place a decade after that promise.

We found the same story, albeit in a more extreme version, with Naftali Bennett and Ayelet Shaked, whose party is likely to be the deciding factor in the election, according to the latest polls. They’re even more right-wing, economically. The platform of their Yamina party is inspired by the Kohelet Policy Forum. It is an especially conservative, American version, including lowering minimum wage and reducing National Insurance Institute (social security) rights.

The centrist parties are also similar in their economic approach. Yair Lapid and his Yesh Atid party view economic reality through the same lense, starting with a free economy – synonymous with neoliberalism – and extended through downsizing government ministries, which means outsourcing public services to the private sector.

It’s no surprise. Lapid’s voters are crowded in Israel’s richest localities, and he neither can nor wants to offer a progressive socioeconomic policy.

Always trailing

But what about the left? Here, perhaps, comes the biggest surprise. Although they define themselves as social democratic parties, Meretz and the Labor Party, which has renewed itself under the leadership of Chairwoman Merav Michaeli, do not offer truly progressive policies, not even a softened version of what U.S. Democrats are proposing. It’s a fact. Neither of these parties is talking about inheritance taxes or taxing the rich nor discussing a truly ambitions green new deal.

Why? The answer is simple. If in the past leftist parties and Labor tended to represent the working class, their constituents today are made up mainly of people of means – the upper middle class. They do not want to hear about an inheritance tax or taxing capital. Thus, their politicians avoid talking about them.

A street in Tel Aviv, December 2020Credit: Tomer Appelbaum

The Israeli left is not really progressive. It does not threaten the capital and revenue of people of means, and does not propose changing socioeconomic priorities. On the other hand, the working class actually believes that the right has done well by it – and it votes in any event focus on other issues, including security and tribalism.

Thus, the rich have nothing to fear from the 2021 election. In contrast to other nations, there will be no inheritance tax, additional taxes on high revenues and no property tax on the super-wealthy anytime soon.

Why doesn’t Israel have even one politician who will propose to half the Israelis who earn less than 8,000 shekels a month to tax inheritances and excessive income?

The first answer is that the Israeli political system – encouraged by policy think tanks like Kohelet, have successfully sold over the last decade the neoliberal narrative and the free market. It convinced Israelis that taxes and progressive policies would hurt the entire economy, and that such policies would hurt them in the pocket. Every time such proposals were raised in public debate, the knee-jerk reaction – sometimes hysterical – was to label them communist and to warn that Israel would become “Venezuela or Soviet Russia.”

The second answer is that a significant portion of Israel, mostly young, is interested in progressive policies, but no person or organization offering a suitable political framework has arisen. Is that true? We won’t know until such a person or framework is offered to the public.

Historically, Israeli politics always moved ideologically and culturally slowly, and always trailed global trends, but adopted them in the end. If the same happens this time, after Israel completely bought into the U.S. Republican economic style, the change happening in the United States with Biden’s election will reach here sooner or later.

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