We Have Mutual Responsibility in the Economy, Too

It's possible to say that we need to raise the tax burden on the rich, as the Trajtenberg Committee has recommended. But it's not possible to claim that the state has abandoned its citizens and tramples the weak. That's simply a lie.

Maybe we're not so horrible, not so divided and not so egotistical as many love to say. The great celebration that broke out after Gilad Shalit's release teaches us that we know how to unite in times of trial, know how to show solidarity and know not to betray the principle of mutual support.

Everyone understands that the release has a price. Everyone knows that after the release of 200 dangerous terrorists out of 1,027, our danger level has risen. But we so much wanted to see Shalit back home. So maybe also in socioeconomic matters we're not so horrible as some people want to believe?

Those people, who mistakenly call themselves social activists, object to free-market economics, competition and privatization. They don't believe in free enterprise. They want high taxes and a large budget so the state can manage everything and distribute everything. They say the state has abandoned its citizens, tramples the weak and is intentionally destroying the public health and education systems. As far as they're concerned, everything is the blackest black. We've become like Sodom and Gomorrah.

But they're so wrong and deceptive. Let's start with macroeconomics. Israel enjoys low unemployment and a stable economy - an enormous asset amid the economic crises rocking the United States and Europe. There they are making vicious cuts, firing hundreds of thousands and cutting wages in the public sector. Here we are debating the Trajtenberg Committee's recommendations on what to add and how to improve things.

The stable economic situation is the result of years of policy that all those so-called social activists objected to adamantly. They pushed all those years for increasing government spending, increasing the budget deficit and raising taxes. We're lucky their views were never accepted.

These "socials" enjoy slandering the state. They will never admit that Israel's income tax regime is the most progressive among all OECD nations. Here the top 20 percent pays 82 percent of income tax collected, while, because of the system of tax exemptions, the poorest 20 percent pays only 2.8 percent. In other words, the government collects the lion's share of its revenues from the upper classes and uses the money to provide health services, education and welfare to the lower classes. That's the way it should be, but why do they have to ignore it?

Felipe Gonzalez, the former prime minister of Spain and general secretary of the Spanish Socialist Workers' Party, was once asked: What is socialism today? He answered: to earn like capitalism and distribute like socialism. Amazingly, the Israeli economy very much follows Gonzalez's dictum. To earn like capitalism means to have a market economy, competition, privatization, a war against monopolies, decentralization, free trade, a floating exchange rate, free capital markets, a restrained budget and a minuscule deficit. To distribute like socialism means seriously progressive taxes and education, health and welfare services at an appropriate level for the entire population.

If these so-called socially responsible people were honest they would state that Israel provides excellent public health to the entire population, including those who don't even pay anything. They would tell us that we have public education from kindergarten through high school, and after the Trajtenberg Committee recommendations are implemented public education will start at age 3.

And if the schools' results are disappointing, that doesn't stem from a lack of funds but from the failure of the cumbersome and wasteful public education system. If so, these people would also mention the National Insurance Institute's welfare system, which distributes some NIS 60 billion a year in child, old-age, disability, unemployment, guaranteed-income and maternity payments.

It's possible to claim that we have to improve these services. It's possible to say that we need to raise the tax burden on the rich, as the Trajtenberg Committee has recommended. But it's not possible to claim that the state has abandoned its citizens and tramples the weak. That's simply a lie, exactly like the lie that we have no mutual responsibility for one another, no solidarity and no sacrifice.