This video is called The Poverty in Israel.
By Jean Shaoul:
Israeli cabinet reveals draconian austerity budget
3 August 2012
Its targets for lower budget deficits after 2013 guarantee even harsher measures in the next few years. The budget, to be discussed in parliament in October, is expected to be opposed by some of Prime Minister Benyamin Netanyahu’s coalition partners, particularly the religious parties, whose supporters are desperately poor and depend on Israel’s already inadequate social safety net.
The budget will hit both middle- and low-income families, while exempting the super-rich.
VAT (a sales tax) will rise from 16 to 17 percent. Finance Minister Yuval Steinitz ordered an immediate tax hike on cigarettes and beer. As it is, revenues from indirect taxes, which affect the poorest the most, are higher than direct taxes on income and higher than in most other Organisation for Economic Co-operation and Development (OECD) countries.
Income tax rates for those earning more than the average wage (NIS8,881, or $2,220 a month) will rise by 1 percent, and by 2 percent on higher earners (NIS67,000 or $17,000 a month). Such is the enormous inequality that just one quarter of wage earners are paid more than the average. To put this in perspective, the tax cuts for the rich introduced in 2003 have led to a cumulative loss of more than NIS40 billion ($10 billion). The top rate of tax will remain unchanged at 48 percent.
All government departments except defence, education and housing, face cuts of at least 5 percent.
Following the social protests last summer, the Trajtenberg Commission recommended free education for all from the age of three, to be funded out of a NIS2.5 billion ($625 million) cut in defence. But the government has increased defence spending, not cut it. Now the funding for education will come from cuts to the rest of social services.