Israeli Congress proposal
BuzzyTheCat
Tomorrow, Day 554 I will be proposing a food tax change and a grain tax change.
The food tax proposal will be a reduction from 10%, 50%, 5% to 10%, 15%, 5%. Today, I voted against the proposal made by congressman Bachir, not because I think we should keep taxes high on food, but because it was simply far too extreme of a reduction. A 35% reduction in food import taxes will allow more food to flow into the country while at the same time protecting our own domestic market from being flooded by surplus food from other countries.
I will also be proposing reduction in Grain taxes from 7%, 70% to 5%, 1%. This, along with the food tax change will help provide more food at cheaper prices to all Israeli citizens. This is a bit of a departure from the goal of the president on taxes and I am sure one or two business owners will not be happy with me, but please hear me out. Israel has no High regions of grain. I know no one wants to hear this, but a domestic grain company can never hope to compete with a foreign grain company in price. It simply can not be done. However, food prices should be not effected simply because Israel can not compete in the raw materials market. There is simply no logical reason to have anything higher than a 5% raw material import tax on a product that we can not produce domestically. Will this kill Israeli grain companies? Unfortunately, yes, it probably will. Will Israeli food companies and Israeli citizens benefit from the move? Absolutely, and without a doubt.
I look forward to serving you all for my third term as congressman and I look forward to many more months as your representative.
Thank you all,
BuzzyTheCat
Comments
Until the Admins make medium resource regions somewhat viable, lowering import rates is the only way to get a diverse manufactured goods market in Israel. Even though I currently work for one of those companies, I would vote for this if proposed.
I suppose it is a step in the right direction, but I think that it does not protect business enough and I don't believe it does anything to cultivate new business.
I think that our initiatives going forward ought to address the following concerns as top priorities:
#1- Promoting expansion of a profitable business sector
#2- Lowering prices for the better of the consumer.
I don't think it is a bad thing to open the markets and drop import taxes generally speaking. To the contrary, I think there should be a diverse and competitive business sector in eIsrael. I simply think this initiative, in this case, goes too far and we should be concerned about income tax and VAT reduction within reasonable levels to promote growth at home.
I would like to see something like 5% 25% 3% in an ideal world. This would bring our tax system to a more competitive rate with the rest of the eWorld while still protecting our markets but opening the door to imports.
Meh, I disagree with the official tax and the grain tax:
For foo😛 the curve of the reduction of import taxes is still way too high according to this proposal, and I think that we'd be better served with a 10, 25, 5 plan. Eventually we'd lower it to 15%, but I think the extra 10 will make a great deal of difference on the rate of businesses being gradually introduced into eIsrael rather than flooding the market.
As for the grain tax: This is probably the best thing to do from the stand point of the finished goods market. And it still wouldn't be too bad for those of us with the high skill levels, just a minor price cut. But the biggest problem comes from the bottom of the ladder: the everyday, low level raw materials worker will feel like he is getting a raw deal, with his wages being shifted perilously close to minimum wage. And in the worst case scenario, where companies collapse: the market no longer has any jobs for grain workers regardless of level, and with an influx of cheap foreign grain, workers will be forced to move to the countries that actually produce raw materials.
Of course, these may just be my own fears, in the same way that the country gets gripped with paranoia everytime someone from Turkey or Iran announces that they're going to be doing a TO, but at least some thought should be given.
I agree generally speaking Joran, but I think as we open the market we must simultaneously increase our international competitiveness through income tax and VAT reduction. If we are going to drop the import tax by 25% we should follow suit by doing something to improve our business sector, and that is to lower the taxes that affect them.
Fair enough, I was just listing my initial objections to it.
Also, would anyone from eIsrael go out into a high grain region and buy a company if the grain law was to be enacted? I still don't like the concept, but if the worst was to happen, then we could at least guarantee to have people work for eIsrael if not in it.
i agree with this proposal since Israel has only 2-3 compenies selling food right now.
this move will lower the food prices and will make sure more ppl can buy higher quality of food even if they earn only 4-5 NIS a day.
This is just something to think about. I agree that a low, if not non existent import tax on grain will all but kill domestic grain companies. However, if we think about it realistically, why should finished goods companies, and average citizens, pay the price for the government protecting a sector of the market which will never mature or flourish?
If we are to succeed as a nation we must concentrate on manufacturing and construction. There is little to no point for raw materials companies to be protected as they simply can not compete on international markets, while at the same time, having to charge high prices in Israel because of lower productivity.
Also, with the grain issue fixed, food will slowly become cheaper regardless of actual food taxes simply because grain prices will no longer be very high. Because of this, I believe a 15% import tax on food, lowered from 50% is a very good start.
Taxes are an ever changing thing and should be monitored. If we begin seeing foreign food greatly undercutting domestic products, we are 24 hours away from a import tax increase.
Basically, the food taxes are negotiable, but grain taxes need to be dropped to their lowest possible point if Israel ever wants to have a chance at exporting...anything.
The numbers are something we can hammer out with some good old fashioned debate. The important part is getting the idea out there that we can't keep propping up the grain sector because its stagnating the growth of the food market in general.
I agree with buzzy's proposals.
We just cant afford to protect the grain sector, no matter how much we want.
Looking at any other country, it never worked.
Med is almost bad as nothing-they cut our pays by 3 times, then sell for more then the world market most of the times, so what are we going to lose here?
Look at the numbers, if I make 15 grains of Q2 a day, they should be sold for 1.1 and with pay of 13 NIS the company owner will have some profit out of it, but im not seeing that happens yet.
Not to mention that there arent enough grains in israel to supply the companies therefore some importing from other countries on thier own, to get cheap and more grain.
Im afraid to say 25% tax on import will scare off any business man from exporting israel his goods, from personal exp, its just not profitable.
If they sell it for 0.5 it will be 0.625 which is not so worth it considering one Q1 food need 1 grain, this "0.625 NIS",and also a pay for the workers.
Lets take skill 3 worker:
only if he has 100 wellness each day, he will make 13.5 Q1 foods a day.
13.5X0.625=8.5 which is cost of grain,more 7 NIS salary, thats 15.5 which the company owner pays for that worker.
Now he should sell all of them for some reasonable profit, lets say profit of 5 NIS per worker.
Therefore he must sell this food for about 18.5 (also taxes are on)
So its 1.37 NIS per 1 food with no VAT, with vat it will be 1.4385
I just run some numbers so we will all see what we are looking at, not to prove my point.
So anyway,if u lower the grain cost the food will be closer to 1 NIS 🙂
Also the 15% IMPORT at the different sectors should not harm israeli businesses but reminding them what the prices should really be 🙂
The thing with income tax is that as income tax goes higher, the monetary value of the currency becomes more stable. There is also the issue of funding government.
The military, MPPs, Hospitals, Defense Systems...they all need gold, and lowering income tax eliminates a good chunk of that income. Also, Israel is far from the high end of Income taxes in the game. 20% is very doable, and for short times, 30+% income tax is sustainable. Large countries like Romania can tolerate 5% income tax simply because they are so massive, they are still making 60+ gold a day, even with bare minimum taxation. Israel can not survive such a thing.
Anyway any good company manager is not buying the raw materials from the Israeli market. All you need to do is to have an org in the country with a low price of the raw material that you need. Then you buy it directly from there and donate it to your company.
So it's not a big loss not having high region in a country. The only loss is that workers have less diversity in which company to work.
I agree with that much swifty for the most part.
I just find it odd that a couple weeks ago grain was at 99% then down to 70% and then suddenly many of the same congress want to abandon tarrifs completely and I am one of the few who is speaking up to at least keep some tarrif on it instead of going in the completely opposite direction with zero protection to the grain economy.
I think that instead of going from massive extremes on import taxes on all products we find a middle ground that I believe will work better in the long term for the economy. That way the effect of tampering will be less if we decide to down the road.
I Agree too,
Because of one good reason:
We don't have enough food's products in the market, and we should decrease the Import Taxes so companies from overseas will have the intent to sell here their own products.
nice move Buzzy.
Then we could go for 5%,15% for grain for now seeing how it works but from the other side we might consider to change it again if it wont work good enough.
As a compromise would you all agree that a 5%, 5% tax on grain would be a good idea? I personally see no point in nurturing a market with no future and no hope of long term survival, but I can not put my foot down and say "it will be 1% and that is final" 🙂
People have next to zero real food to eat. Our Q2 food is gone within a day of it being listed, and currently, our Q3 food is almost double the price it should be... beyond that, we have no domestic Q4 or Q5 food at all.
A large part of that problem is the 50% import tax on food... but a portion of the problem is also the fact that we have no grain on the market.
Israel needs to concentrate on manufacturing and construction. That was the admins original intention when they devised the strategic raw materials module and it is the only hope Israel has long term.
And just for the record, I brought this up 3 months ago, but the country was still very young and we needed time for things to work out and become slightly more populated before we really started making drastic changes.
I think 15% import tax on food should be good. It will protect the domestic industry, but still they will have to put compatitive prices and not a monopol prices.
In other word it will give little protection to domestic industry, but still will remind them what the real prices should be.
Thinking about it there is no difference between 1% and 5%.
Its or u let them in to fix the grains issue or you're not.
We can go for 1% at first and see how it works while staying alerted in case (i dont know what case since israeli companies cant manage well anyway)...
@Sadeh Badeh
Yes, The idea of 5% is good maybe even little bit more, consider when you are decreasing the amount of taxes on the grain, the price will be lower too..
Which will cause having no raw material industry in eIsael - which in my opinion medium is'nt good enough.
Also means eIsael is depending on outsiders to provide her the goods... only the time will tell what is better.
As you can buy raw materials directly from a different country market, we don't really need companies to export to Israel. The only thing that we could gain from lowering the import taxes is that some companies will buy imported grain and the country will get taxes from it. If we keep the import tax high no one will export to Israel, companies will buy it directly from other countries and the goverment won't see any money from it.
Voted no on grain tax.
Income tax relief was in the right direction, but I do not agree with completely eliminating tariffs to this degree.
I support the 5%/5% plan, our domestic raw material production will be decemated, but this does offer us the opportunity to reach out to our friendly/allied nations to create a stronger economical bond by having them supply us with needed resources 😃
Voted no on Grain Tax, Prices will indeed get cheaper, but you may end up causing a mass exodus of former grain workers. Is the reduction in price really worth the reduction in population? I think not.
Joran is right, I voted NO!
well i can open a grain company in USA and export to israel if i will have 3-4 companies here that need it...
High tariffs seldom live up to there orignal intentions. More grain equals more food, so everyone stands to benefit. Our own grain company can compete, thorugh the market will be tougher.
High tariffs seldom live up to there orignal intentions. More grain equals more food, so everyone stands to benefit. Our own grain company can compete, thorugh the market will be tougher.
I think high tariffs is almost without exception the norm in erep in a strong economy, so they have done very well in my estimation of living up to expectations.
As I said again though, no one is supporting that I have seen, the extreme protectionism of the grain sector that we have seen with past congresses of 99 and 70%, just looking to strike a balance that is good for both our grain sector and our consumer prices.