Government plan: tax cuts for those who earn up to the average wage - compensation for self-employed

Finance Minister Avigdor Lieberman and Prime Minister Naftali Bennett present their new economic plan. At the center of the program are two significant steps: tax cuts for those who earn up to the level of the average wage in Israel and the second step - a new compensation outline for self-employed people who were injured during the Omicron crisis. The cost of the program is estimated by the Treasury at NIS 4 billion in terms of loss of revenue. The core of the plan is, as mentioned, a reduction in taxes on work for those who earn low wages and a reduction in caps.
Prime Minister Naftali Bennett said that "inflation in Israel is low compared to what is happening in the world but because it lied here it breaks the public's back. We put working families at the center on both the net side and the expenditure side. These measures will increase the net of working families It.
"We will reduce the tax per employee by NIS 220 per month for each child. A family of three children will enjoy another NIS 1,300 net. We reduce products in a variety of consumer products such as chicken, eggs and so on. The government will share the burden of electricity costs. But in the end, our ability Facilitating working families stems from the fact that we run an economy of growth rather than closures.
"What guides me is that whoever works can earn a decent living. The government sets a goal to help families at the challenging stage. These are not tactical steps but a new contract between the state and citizens. A fair contract that says the good workers deserve to save more than their salary. Real competition that will reduce prices.
"We took care of the Holocaust survivors, the soldiers and today we take care of the working families."
Finance Minister Avigdor Lieberman said: "What is important is to emphasize that despite the timing, even without the price increases, we would have published the plan and there will be more steps in a month."

Program highlights:

* An additional credit point will be given to families with children between the ages of 6 and 12. The cost of this section is NIS 2.1 billion.
* Increasing the subsidy of after-school programs in localities in clusters 4 and 5. 60,000 children will benefit from this benefit. This is an immediate saving of NIS 250 per month per child.
* Increasing the work grant for those who earn under income tax. They will receive a 20% increase in the work grant, which applies to 300,000 workers in Israel.
* Reduction of electricity tariffs so that the price will increase by 3.4% instead of 5.7%. The reduction will be made by eliminating the excise tax on coal.
* Elimination of caps on: kitchen utensils, furniture, bedding, hygiene products, spare parts for vehicles, batteries for electric vehicles, refrigerators and washing machines, meat, tuna, eggs, olive oil, sunflower oil and so on.
* The Treasury will deal with centralization in the economy and there will be dramatic decisions.
* There will be a war of attrition in black capital.
A tax cut for wage earners that is up to the average wage in the economy is a necessary step especially when the intention is to accelerate growth and leave more money in the pocket of the working citizen at the end of the month to cope with the rise in the cost of living.
It should be remembered that tax cuts are always a welcome thing but there is a problem and that is that such a reduction accelerates inflation and here we are in a trap after the Israeli economy (and certainly the world) rose in inflation and central banks (including the Bank of Israel) are facing monetary austerity measures.