"There is no reason why income tax should not be lowered, given that there is a large surplus in collections," said former Ministry of Finance director Dr. Joseph Bachar today. Bachar, who was addressing a conference on reform held by the Ramat Gan Law School, hinted that the Knesset was the main opponent of tax cuts. Policy makers at the Ministry of Finance had, he insisted, long since realized that lowering taxes principally for people earning NIS 7,000-17,000 a month would be preferable to reducing the national debt through surplus tax collection, since the former would drive economic growth.
Bachar also called for lower capital gains taxation, and the setting of a nominal taxation rate on all investment instruments. "It is now time that taxation rates were unified, regardless of the difference in tax margins between factories, infrastructures, real estate or stocks. The fact is that today people are not buying properties for the purpose of living in them."
Bachar stressed that the rapid economic growth had been made possible thanks to government policy which since 2003, had focused on strengthening the private sector and reducing government intervention. Israel's 10-year interest rate was now lower than that of the US, he noted.
Commenting on the management fees charged by investment houses, Bachar remarked, "I too have had difficulty understanding the investment houses' fee composition, but the consumer is the best educator there is - I am willing to pay them high management fees if they deliver a high return for me."
Published by Globes [online], Israel business news - www.globes.co.il - on May 20, 2007
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