Having it both ways
Most of the protest tents have been cleared away. Their dwellers' hopes of hearing the conclusions of the Trajtenberg Committee while sitting on Rothschild Boulevard and in Habimah Square have been disappointed. In any case the rains came early this year and the remaining protesters were caught in the downpour. Let's hope that the conclusions issued on Monday allow us to have it both ways, to bridge the gap between the budget deficit and the protesters' demands for social justice. Let's hope they include the following:
• The national housing committee law has merit, but should be augmented on two points. Reports from the field indicate that entrepreneurs have failed to overcome the bureaucrats. Building has remained static, in major cities as well. This is a pity in light of the economic tsunami that is making its way here from Europe, when every new job will be rare and in high demand. The government should grant free or subsidized land to contractors in outlying suburbs of big cities but intervene in the market by establishing an upper price limit for finished apartments. In a kind of chain reaction, this will reduce the cost of housing throughout Israel.
• This may sound paradoxical, but it's an accurate depiction of reality. The Economic Concentration Committee, headed by Haim Shani and Eyal Gabbai, has enacted a bold half-measure. It has done nothing to dismantle the pyramid companies (where the board of directors of a holding company controls the votes of the holdings while owning a minority of their shares) but did lay the groundwork for a fight against the cartels. One way the Trajtenberg Committee can finish the job is to actually give it teeth. It can take concrete steps to reduce the unbearably high cost of living, caused, in part, by the concentration of so much economic power in so few hands.
• It is impossible to fulfill all the demands. Especially not in a country like Israel, where every sector raises its own banner of oppression. Let's just hope that Trajtenberg calls for increased investment in education ahead of anything else, including health care. Within the education sector, universities should come first because they serve as a stop-gap against Israel's brain drain. We must also allow working mothers to write off some of the costs of day care and nannies on their taxes. As our sages said, Age three to letters, meaning that mandatory (and free) education should start at age three.
• The (expected) main recommendation of cutting the defense budget is misplaced. Defense Minister Ehud Barak was too quick to promise that his ministry would do its part for the social justice movement. Cutting the defense budget at a time when Iran, Turkey, Egypt and now the Palestinian Authority are behaving erratically merely adds fuel to Iranian President Mahmoud Ahmadinejad's view that Israel cannot cope or survive. Defense is not where the money should come from (except in terms of people who served in the army or national service qualifying for benefits, particularly those who served in combat units). By Sunday night it emerged that Prime Minister Benjamin Netanyahu had responded positively to the Finance Ministry's request to cut the defense budget and transfer authority over it to bureaucrats in the Accountant General's office. If this decision remains in effect it will be the first blunder on the road to social reform.
• Those who need to step up and contribute their fair share, whether by force of law or voluntarily, are the Arab and ultra-Orthodox sectors. A high percentage of their members shirk military and community service and refuse to work for a living. The cost of the welfare benefits they enjoy is higher than the Israeli economy can or should pay for. The burden imposed by kollels and yeshivas is unbearable. Without bread there is no Torah, our sages say, but the Treasury is not a bakery of free bread.
• If the government does all these things and as a result we exceed our budget by a moderate amount, it would not constitute a national disaster. But only if the amount is moderate and we cover it not through deficit spending but by raising taxes. We should lower the value-added tax but raise inheritance tax and income tax. Income tax should be raised, as the social protesters demanded, on wealthy individuals and not companies (so as not to reduce their incentive to initiate business deals ahead of the recession.) And sadly, yes, because there is no choice I am willing to pay more income tax.
טעינו? נתקן! אם מצאתם טעות בכתבה, נשמח שתשתפו אותנו