Oct. 9 (Bloomberg) -- Israeli Prime Minister Benjamin Netanyahu again asked the Cabinet to approve the recommendations of a government panel that proposed raising taxes on companies and on individuals who earn more than about $130,000 a year.
An initial Cabinet vote on the proposals was put off last week after Netanyahu failed to garner sufficient support from ministers at an Oct. 3 meeting.
“Approving the report will allow us to submit detailed decisions to the Cabinet in order to lower the cost of living,” Netanyahu told the Cabinet at its weekly meeting in Jerusalem today, according to a statement posted on his office’s web-site. “A combination of these steps will lower the prices of goods and marketing in the economy.”
Netanyahu tapped the panel, led by economist Manuel Trajtenberg, to come up with proposals after mass street protests across the country calling for lower prices and more affordable housing. The committee proposed that corporate taxes be increased to 25 percent next year and 26 percent in 2013 from 24 percent this year. It said the top rate of personal income tax should be raised to 48 percent, and that the country must increase its stock of affordable housing and open its markets to more imports.
The proposed tax increases would raise 30 billion shekels ($8 billion) over five years, and the money should mostly be spent on education, the panel said when it presented its recommendations on Sept. 26. It also proposed cuts to the defense budget.
The Trajtenberg report has been criticized by ministers from two parties in Netanyahu’s Likud-led ruling coalition, Foreign Minister Avigdor Liberman’s Yisrael Beitenu and the religious Shas faction, who said it does not do enough to provide solutions for impoverished Israelis.
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