National Labor Union Chair Opposes Finance Ministry's Capital Market Reform Citing Harm to Working Families

The Israeli Finance Ministry is advancing a comprehensive reform of the short- and medium-term savings and investment market, introducing a "Unified Investment Account" to harmonize tax conditions across various savings instruments and allow savers to switch freely between products without triggering capital gains tax. The ministry expects this reform to boost competition, lower management fees, and benefit most savers with relatively low balances.

However, critics, including the National Labor Union, warn that the reform imposes a cumulative deposit cap of 200,000 shekels per individual to qualify for new tax benefits. Savings beyond this threshold would lose preferential tax treatment and face full taxation, potentially undermining long-term returns. While the Finance Ministry argues that most existing investment accounts hold less than this cap, opponents see the limit as a trap that restricts middle-class savers from building substantial financial security.

Yoav Simhi, chairman of the National Labor Union, strongly opposes the reform in its current form, emphasizing that reducing tax benefits for savers exceeding the cap directly harms working families striving for economic stability amid rising living costs, high interest rates, and heavy household expenses. He criticized the Finance Ministry for burdening the middle class instead of encouraging saving and financial responsibility, stating that the reform threatens families' ability to accumulate wealth and prepare for retirement. Simhi called for policies that strengthen savers rather than penalize them, underscoring that the middle class should not be treated as a revenue source for the state.