
Originally Posted by
curlyg
I'm not an economist but some pretty basic ideas come to mind.
The most straightforward thing to do would be to get the underutilised portions of the population, mainly Haredim and Arab women, into the workforce. More workers = more growth = more tax revenues for government. This doesn't have to hurt anybody, it should be pretty uncontroversial if you can get the religious leaders on side. This was one of the major recommendations of the OECD recently too.
For more controversial stuff, imo, VAT needs to be dropped to a reasonable level - this is basically a tax on poor people (it's a tax on consumption, which means people with small budgets are paying a larger % of their income on necessities like food). Break up and privatise the government monopolies, especially the electric corporation and others built on the same model -- bring down costs by eliminating ridiculous benefits. Create a regulatory agency to aggressively crack down on the monopolistic/oligopolistic pricing of the major Israeli corporations. End protectionism for Israeli industries -- for heaven's sake allow importation of cheese from overseas then you won't need cottage cheese protests, the Israeli companies will drop their prices to match the foreign competition. Drop child subsidies, arnona subsidies, funding for private schools and yeshivot, and other anti-productive benefits and use the savings to cut income taxes and give people disposable income. Cut indirect taxes on fuel and electricity and make up the losses with a reasonable taxation regime over the new natural gas companies entering into production over the next few years in the off-shore natural gas fields. Take an axe to the holy cow that is the IDF - officers don't need to retire so early and they don't need such amazing retirement benefits, stop spending $120 million to buy a single American F-35... Cut the fat out of government. I don't want to name anything too specific, but I've seen how Israeli embassy and consular officials live overseas, and it ain't cheap. I'm sure this happens all over the world, and inside Israel too. The government should also take advantage of Israel's strengths - technological innovation, an innovative military industry, etc. - to generate civilian industries. I read recently that a relatively small investment in civilian space technology would create a massive return for Israel due to its existing space know-how within the military industry, but last I heard the government wasn't able to muster the money to implement this idea.
I'm sure that if you gave technocrats control of the country for 36 months they would just crush all of these corrupt entrenched interests and things would be running much more smoothly. Unfortunately, that will never happen. Instead you have a government with 47 ministers, 25 deputy ministers, 12 deputy prime ministers, each with 45 aides, and so on -- and not one of them seems to be competent!
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