Israel's Income Tax Gap Between Sectors Widens Dramatically
Translated & summarized from Cursorinfo by baba
An Israel Democracy Institute report shows the income tax gap between non-ultra-Orthodox and ultra-Orthodox Jewish households has widened to 10.5 times, nearly doubling since 2009. Payments to the National Insurance Institute also show a 2.4-fold difference. The study links these disparities to lower male labor force participation and specific career choices within the ultra-Orthodox community, while ultra-Orthodox women show academic gains but remain concentrated in education.
The story in 6 lines · by baba
- Non-ultra-Orthodox Israelis pay 10.5 times more income tax than ultra-Orthodox Israelis.
- The income tax gap between the sectors has nearly doubled between 2009 and 2024.
- Ultra-Orthodox men's earnings are significantly lower if they remain in yeshivas past age 18.
- Only 4% of ultra-Orthodox men serve in the army, compared to 89% of other Jewish men.
- Ultra-Orthodox women show increased academic achievement but remain concentrated in education.
- Payments to the National Insurance Institute are 2.4 times higher for non-ultra-Orthodox families.
A new report from the Israel Democracy Institute reveals a significant and growing disparity in income tax payments between non-ultra-Orthodox and ultra-Orthodox Jewish households in Israel. Between 2009 and 2024, the income tax gap has nearly doubled, with non-ultra-Orthodox citizens paying an average of 10.5 times more in income tax than their ultra-Orthodox counterparts. This analysis, conducted by Dr. Gabi Gordon, also highlights a 2.4-fold difference in payments to the National Insurance Institute, favoring non-ultra-Orthodox households.
Over the past 15 years, average monthly income tax payments for secular, traditional, and religious Zionist families increased by 92%, from 1,480 to 2,840 shekels. In contrast, ultra-Orthodox families saw a much smaller increase of only 12.5%, from 240 to 270 shekels. This widening gap means that while non-ultra-Orthodox payments exceeded ultra-Orthodox payments by 517% in 2009, the difference reached 952% by 2024.
The study attributes these income disparities to differences in labor market participation and career choices. It indicates a direct correlation between the age a man leaves religious studies and his earning potential. Men who leave yeshiva between ages 17-18 earn up to 71% of the average secular income by age 40, while those who leave later earn significantly less. A substantial portion of ultra-Orthodox men remain formally enrolled in religious institutions, with 45% in yeshivas at age 30 and 27% at age 40, though actual attendance may vary.
Career choices also play a role, with 30.2% of ultra-Orthodox individuals working in education compared to only 4.8% in high-tech. Military service is also significantly lower, with only 4% of ultra-Orthodox men serving compared to 89% of the general Jewish population.
In contrast, ultra-Orthodox women have shown significant academic progress, with the rate of those obtaining full matriculation certificates rising from 34% to 77%. However, 51% still choose pedagogical specialties, leading to an oversupply of teachers, a situation reportedly maintained due to the interests of religious parties. Consequently, 42.5% of ultra-Orthodox women work in education, compared to 19.5% of other Jewish women, and only 4.9% of religious women are employed in high-tech, versus 9.4% in the general Jewish sector.
