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Taxes: Why is Israel Blocking Income From the Outside?
Hello dear fellow eIsraelis,
Please forgive me for my bad English (I am writing this article with a dictionary open).
These days, we are aware of some dramatic changes in the israeli tax system.
I think most of these changes are characterized by the fact that they are ment to serve two major goals.
The first is stoping the coming of products into our market from the outside, mostly from the manufacturing market. I maybe naive, but I just cannot understand why. Israel needs these products. Israel can't support it's economy by itself. It is not a very offensive country, we do not have any raw matirials on our lands. We need economic support from the outside.
Until now, if I'm not wrong, most of the 99% import taxes were rejected, but in a prettry close battle between the congressmen (looks like that not all of them listen to the "coordinations frome the top".
To me, anyway, it looks like Israel is heading for a reform that's meant to close the Isralei economy. I may only guess that the goverment's plan is to try and control the israeli economy without interference from the outside. I don't think it's a smart idea. But that's my opinion.
The second goal is making money out of this war, using the 15% income tax on gifts and weapons (that also may explain the 99% changes. They'r trying to block income from the outside so they can make money out of they'r own citizens).
Well, prbably everything I just wrote is garbege. Please don't be hard on me, I'm new here and trying to understand the system.
Aviv
Please forgive me for my bad English (I am writing this article with a dictionary open).
These days, we are aware of some dramatic changes in the israeli tax system.
I think most of these changes are characterized by the fact that they are ment to serve two major goals.
The first is stoping the coming of products into our market from the outside, mostly from the manufacturing market. I maybe naive, but I just cannot understand why. Israel needs these products. Israel can't support it's economy by itself. It is not a very offensive country, we do not have any raw matirials on our lands. We need economic support from the outside.
Until now, if I'm not wrong, most of the 99% import taxes were rejected, but in a prettry close battle between the congressmen (looks like that not all of them listen to the "coordinations frome the top".
To me, anyway, it looks like Israel is heading for a reform that's meant to close the Isralei economy. I may only guess that the goverment's plan is to try and control the israeli economy without interference from the outside. I don't think it's a smart idea. But that's my opinion.
The second goal is making money out of this war, using the 15% income tax on gifts and weapons (that also may explain the 99% changes. They'r trying to block income from the outside so they can make money out of they'r own citizens).
Well, prbably everything I just wrote is garbege. Please don't be hard on me, I'm new here and trying to understand the system.
Aviv
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I think you generally got it right.
To help domestic economics, they should support domestic producers. They should also protect them from cheap imports - generally speaking,
income tax should be as low as possible, import tax as high as possible and VAT should be set as necessary to keep country treasury full enough.
yeah, we barely import any goods at all... we are a production country without much raw materials so we should NOT be importing goods we should be EXPORTING only...
at least, thats the way I understand it
By "protect them from cheap imports" you mean make import taxes high so that foreign buisnesses don't interfare and make buisness here harder with more compitition?
I agree with that, but this should'nt be done by wasting taxes on this.
I guess there are other methods to prevent to much import. Sometimes israeli companies need products from the outside. Taxes shoudn't be wasted on such things as totally preventing trade with foreign companies.
Don't you think?
Dimitar - How can we be a production country with out any resources?
These should come from the outside, and I think the Knesset is using this fact to make money out of raw resources imported to Israel.
But this is a dangerous game they're playing - because this will probably make foreign companies not sell to us at all.
The products we set 99% import tax on them aren't raw materials, and we produce enough of them.
And no, the government will not make money out of raw resources imported to Israel because no one will now export us guns , gifts and moving tickets - and no one should do it anyway.
avw - Why are you saying noone will export us guns and tickets? This is war time, maybe our allies will want to help us against turkey, help is be prepared?
How do Israeli companies need products which are in the 'manufacturing' catagory?
We switched from 60% import taxes to 99%. So....we went from blocking income from the outside, to still blocking from the outside. No one imported at 60%. We just standardized the rates.
Also, all of the 99% import tax changes were passed (moving tickets will be later today).
Many of the high end products (Q4 and Q5) in our market are imported from other countries. All we are doing is making it more difficult for Israelis to buy better products.
The raw material taxes are idiotic. Why would we increase import taxes on raw materials? All that does is make it more expensive to manufacture products in Israel. That will cause one of two things:
1. Companies will not be able to hire as many people due to the increase in production costs.
OR
2. Companies will need to raise prices to cover the increase in expenses.
Clearly most of the Knesset has never taken a basic economics course!
Seeroy:
"We switched from 60% import taxes to 99%. So....we went from blocking income from the outside, to still blocking from the outside. No one imported at 60%. We just standardized the rates."
What for? It is war time. Israel needs as much gifts and weapons as can be. Why choke are nation's economy?
as Tory44 said, with these taxes it's going to be harder for companies to manufacture nessecary products. We sould act the opposit.
Seeroy - Please explain to me this program. I simply don't understand it.
Import tax on raw materials - bullshit at all
If you are clever owner of a for example weapon company, your organization is somewhere in cheap iron country (generally Brazil, Spain, Greece, Russia) and you buy iron on local market and then directly donate that bought iron to your company in Israel. You avoid any import taxes. So we actually dont need ANY raw material offers in Israel, we can simply buy them from anywhere in the world via our organizations.
Ad weapons: another bullshit
Its time of war and just have a look at stocks/offers of weapon companies. For example, Q1 weapons - in israel were yesterday almost 1800 !!! stock weapons Q1 for really minimal price! Other thing is fact that we have all the possible Q levels in local companies - so no need of importing them.
Main problem in Israel is overproduction and over-employment. Most of companies dont have ideal number of employees. Not even talking about how stupid some employees are (well 30 on the long run..)
99% import taxes on goods will simply show the rest of world that we are not willing any cheap imports. That will protect local producers AND will help all employees.
i export weapons outside, to the usa so i know what i'm talking about.
in the moment they'll import weapons to israel, consider this market dead.
the market itself is little, there is about 100 citizens active at israel at max.
maybe 5 citizens buy weapons every day.
maybe.
We don't have raw materials and it means that most of our population is working in manufacture, the construction is also almost dead. We are producing much more than we can consume so there is no reason to import anything.
I also don't agree with lowering the import tax on food. Maybe in the short term it will bring us the Q4 and Q5 food that "we so much need", but it the long term it making our economy weaker as we won't be able to produce those products. By getting the import tax higher we will open the place for a domestic Q4 and Q5 producers.
^Agree w/ Swifty on the last point. Question though: how much Q4 and Q5 food do we need? That is my only concern, that we are alienating the consumers of high-quality food with the high tax.
Tory and Aviv, read Towanda's statement about "overproduction and over-employment." It seems we work too much in manufacturing and we just simply are not a market for imported goods.
I'm level 18 and I have never bought anything higher than Q1 food. It gets me by, its cheap, and I can find it at a reasonable price made right here in eIsrael.
Also notice that buying gifts instead of high quality food is cheaper and more effective for keeping high wellness, as gifts are not effected by wellness as food doe's.
I am happy that at least some people agree with me and they know something about macroeconomics. I was expecting fellaz from goverment to state something as well.
Okay...If you PM me, I'll be able to explain all of this in great detail to you.
But I do plan to write an article soon, saying why exactly we did these tax changes.
eIsrael needs 100-200gold a month, that's it.
eIsrael will not have a strong market, as long as people work, we are fine.
Towanda - I have two questions for you:
1- You said that high import taxes protect demostic producers.
How does it protect them?
2- You said Israel is an over-production and an over-employment country. How is it possible? What's bad about lots of employes?
These are honest questions. I am a beginner and really want to know.
Towanda - I have two questions for you:
1- You said high import taxes protect demostic companies. How does it protect them?
2- You said Israel is an over-production and an over-employment country. How is it possible? How can a lot of employees be a bad thing?
These are honest questions. I am a begginner and truely want to know.
Thnaks