The Doomed Reform

It's hard for politicians to admit to mistakes, certainly for politicians named Roni Bar-On. Yet he did it, and with panache, convening all the treasury chieftains in his office to say it straight: "I was wrong. The tax reform is canceled. The exemption on study funds stays."

Presenting a massive reform and then yanking it is a huge egg in the treasury's face, especially as the fiasco had been entirely predictable. It was writ large on the treasury walls. They say one should look before one leaps, or at least think before calling a press conference, and the decision to cancel the tax break on study funds was a mistake at every level, political and public. One has to wonder how a seasoned, and careful, political animal like Bar-On could have stumbled like that. He knew what happened to former finance ministers who tried to touch the sacred cow of study funds: they were humiliated by the Histadrut labor federation.

Bar-On's economic manifesto made touching the study funds almost instinctive, but what blunted his political horse-sense? And where, where were his advisers, never mind the dewy-eyed young ones - what about the experts at the Tax Authority, at the budgets department, at the accountant general's office? They'd been there and done that, and they knew what would happen.

The tax reform plan has been kicking around the treasury since October 2007. The cuts in corporate and individual tax were fully covered by economic growth, originally. The treasury just needed an opportunity to launch it. Bar-On decided to hitch a ride on the plan's back, but took the study funds with him. And by the way, if he hadn't obtusely ignored labor leader Ofer Eini, he wouldn't have to stand there humbled and say, I was wrong.