Israeli Parties Promise Higher Net Pay; Experts Question Feasibility

Several Israeli political parties are proposing measures to increase citizens' net salaries, but experts are questioning the practicality and potential impact of these plans. The "Democrats" party advocates for the automatic adjustment of tax brackets to account for inflation, a move intended to prevent a silent erosion of income. They also propose expanding the work grant for low-wage earners and gradually increasing the minimum wage. The "Yisrael Beiteinu" party suggests extending the work grant to single individuals over 26 earning up to 8,000 shekels, aiming for a direct increase in disposable income. "Religious Zionism" promises to reduce income and corporate taxes, coupled with efforts to combat the black market and digitize the tax system.

In contrast, the Likud and Shas parties declined to respond to a questionnaire on economic issues, leading analysts to assess their platforms based on past actions and public statements. The Israel Democracy Institute, Berel Katznelson Foundation, Arlozorov Forum, and Kohelet Forum experts analyzed the parties' proposals. The Likud-led government previously raised VAT to 18%, froze tax brackets and credit points, and increased national insurance fees, which experts noted disproportionately burdened those with lower incomes. Shas was also part of this government, with experts suggesting the party did not leverage its political weight to protect net salaries despite its social rhetoric.

"Yisrael" (likely referring to the "Yesh Atid" party, though not explicitly stated as such in the text) stated its goal is to increase the net salary of the average employee through economic growth, expanding employment, and reducing income tax, while shifting some tax burden to products with negative externalities. Experts from the Israel Democracy Institute expressed skepticism, noting that new workers might have low productivity and not reach taxable income levels, and that combating the black market is not a magic solution. The "Together" party focuses on reducing the cost of living to increase purchasing power, rather than direct tax changes. Experts acknowledged this approach but noted it sidesteps direct tax and salary adjustments.

The Joint List argues that right-wing governments have enriched the wealthy at the expense of workers and proposes a redistribution of income. However, experts from the Israel Democracy Institute called this claim a "distortion of reality," pointing out that the top income brackets contribute the vast majority of direct taxes. They warned that the Joint List's policies could widen the gap and encourage skilled professionals to leave the country. "Otzma Yehudit" did not provide a response, with experts stating the party lacks a clear policy on net salary increases.

Experts highlighted several shortcomings across the parties' responses. For the Democrats, Yisrael Beiteinu, and Religious Zionism, the funding sources for their proposed measures were unclear. For "Yisrael" and Religious Zionism, the plans rely on unproven assumptions about economic growth. The "Together" party and the Joint List were criticized for not providing a clear mechanism to directly impact the average employee's paycheck. The Likud, Shas, and Otzma Yehudit were criticized for not providing any public response to these critical economic questions.