Coalition Votes Against Economic Plan Bennett Campaigned On – and Loses

June 16, 2022 by Aryeh Savir - TPS
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Israel’s coalition registered another defeat at the Knesset plenum on Wednesday evening when the opposition put forward a segment of the economic plan Prime Minister Naftali Bennett promoted while campaigning, and the coalition lost the vote against it.

The Knesset plenum approved in a preliminary reading the bill to amend the Income Tax Ordinance, put forward by Member of Knesset (MK) Galit Distel Atbrian of the opposition and a group of Knesset members.

The proposal won the support of 51 MKs against 50 who opposed it

Israeli Prime Minister Naftali Bennett Credit: Amos Ben Gershom/GPO.

and will be forwarded to the Knesset Committee.

The reduction in income tax was part of Bennett’s “Singapore Plan” he campaigned on, a plan he and his coalition now voted against. Distel Atbrian put forward the bill to embarrass Bennett, again.

The bill proposed to reduce the tax rates on an individual’s taxable income, as well as the tax credit rate for a contribution to a public institution, and the deduction rate of amounts paid for maintaining an individual’s or spouse’s pension or for survivors’ pension insurance. It also proposed to reduce the corporate tax rate from 23% to 15%.

The explanatory memorandum to the proposal reads that “the purpose of the bill is to encourage the creation of high-wage jobs that are expected to lead to the opening of many more jobs, raise the standard of living of the public, and even encourage immigration to Israel.”

The reduction of the corporate tax is “expected to encourage the establishment of tens of thousands of new businesses and the expansion of existing businesses. The expectation is that instead of the profits of a business being paid to the state coffers, they will be invested in recruiting more employees. In addition, the said reduction will help eradicate black capital, because under a low tax regime it will pay to be a law-abiding citizen.”

Distel Atbrian said after the vote that “thanks to the fact that the opposition is stronger than the coalition – my tax reduction law has been passed in a first reading.”

“Who are among the opponents? [Deputy Minister] Abir Kara,” a member of Bennett’s Yemina party. “Who won? Employees who do not finish the month because of income tax, self-employed, small business owners, licensed dealers, companies Ltd., everyone,” she said.

The coalition suffered another defeat at the plenum when a counter-proposal for the government’s kosher telephone reform passed in its first reading. The Meretz party of the coalition voted by mistake with the opposition.

The coalition withdrew the majority of the bills it planned to put forward with the understanding it would lose the votes.

After only a year in power, Bennett has lost the majority in the Knesset, and most political analysts believe that an election is only a question of time.

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