Taking Stock / A Rose Would Not Smell as Sweet

Mazal tov! The Prime Minister's Bureau came up with a brand-new idea this week, to impose a mandatory bite on salaries. All Israeli citizens will have to fork over 2 percent of their salary, like it or not.

But what to call it, there's the rub.

A top source at the Prime Minister's Bureau told Yedioth Ahronoth on Tuesday that the idea is to finance the growing deficit by imposing a mandatory loan to the government this year. "It hasn't been decided if it should be called a `security loan' or `emergency loan' or maybe just... a `mandatory loan'."

Whatever you call it, the idea is straightforward enough. After the wave of tax hikes in 2002, the government plans to shove its paw even deeper into its people's pockets in 2003 in order to finance its tremendous deficit. The Prime Minister's Bureau and treasury have several tax hikes and decrees in mind. The only question is what to call them, or in other words, how to market them to the public.

The choices of "security loan" or "mandatory loan" are not accidental. The government wants the taxpayers, the American government, the rating agencies and all the rest of its financial backers to perceive the new taxes as resulting from the security situation, from war, and not from persistently dreadful macroeconomic management.

But if we are to give the loans the government is forcing down the people's throat names faithful to their true provenance, they should really be called:

l The Arik Loan, after our prime minister, who in two years of power sent the Israeli economy back five or ten years in time, by most economic parameters. He had help, of course, from the global crisis and the intifada, but these alone could not have reduced the economy to its current status.

l The Silvan Loan, after our arrogant finance minister of the last two years, who thought he knew better than all his aides and experts and who delivered the two most unrealistic budgets the nation has even seen; after the man whose stint in the seat brought two other records, too - the Finance Ministry's credibility was brought to a new low, and the government's capital costs reached unprecedented heights.

l The Litzman Loan, after the chief of the Knesset's Finance Committee who, like his predecessors, made the committee, the Knesset members and the Finance Ministry dance to the tune of his flute and the violins of the ultra-Orthodox parties; the man who quickly clarified to the finance minister that genuine reform in transfer payments to his constituents would not happen; and that a toll would be exacted for the passage of any other reform, too.

l The Oberkovitch Loan, after the Electric Corporation labor leader and other labor representatives of Israel's state-onwed companies and monopolies representing tens of thousands of civil servants earning NIS 20,000 to NIS 50,000 a month, bloating the government's expenditure on the public sector to 56 percent of GDP.

l The Nasdaq Loan, for the American exchange on which most Israeli tech stocks are listed. The bursting of the Nasdaq bubble gave politicians a perfect excuse for Israel's sorry economic situation. If Nasdaq hadn't crashed, they'd have real trouble finding someone to blame.

l The Knesset Loan, after Israel's legislature. In recent years it has excelled in passing destructive laws that undermine the foundations of the nation's economy, tamely acquiescing to every lobby it possibly could, blocking structural reform after structural reform and persistently evincing astonishing ignorance of economic matters.

l The Rabinovitch Loan, for the first Rabinovitch committee on tax reform, which reduced the tax on entrepreneurs and developers by about NIS 700 million at the height of the gravest fiscal crisis in Israeli history.

l The Ceiling Loan, for the eradication of ceilings on National Insurance and health insurance payments by Finance Minister Silvan Shalom, just to show everybody how he's "taxing the rich". In practice, the gesture induced the rich to dodge the decree by rerouting their salaries through newly-registered corporations, which lowered their tax bill and seems likely to result in a new NIS 3 billion hole in the budget according to some estimations.

l The Guarantees Loan, after the guarantees that the U.S. government indicated it would extend to Israel if it lined up with American interests in the Middle East, pronto. That signal eradicated the immediate threat of financial crisis, saved the government's neck and allowed it to gaily pursue its irresponsible economic policy, assured that when the crunch arrived Uncle Sam would be there to pay the bill.

l The Suckers Loan, after the citizens of Israel who have accepted that declines in the standard of living, in GDP, in salaries and in joie de vivre are inevitable, that they result from force majeure and not from the long line of cynical elected and other officials who for years have been running the nation's economic affairs in a shameful, insulting and lamentable manner.