2025-03-26 16:21:00
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Explore the discrepancies in tax rates among the income brackets in Israel, highlighting how lower-income earners pay slightly below the average tax rates found in developed countries, while high earners contribute more. Insights into potential tax reforms for middle-income earners are also discussed.

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Israel tax rates, income inequality, tax reform, high earners, middle class, economic policy, developed countries comparison

Disparities in Tax Contributions Among Income Groups in Israel

Overview of Tax Contributions

In Israel, the lowest income deciles pay slightly lower tax rates compared to the averages seen in developed countries. Conversely, the top income decile bears a tax burden that exceeds these averages. This trend raises questions about the equity and efficiency of the current tax system.

Tax Contributions by Income Bracket

Low to Middle-Income Deciles

Individuals earning between 18,000 and 28,000 shekels per month are noted to pay relatively low taxes. The findings suggest that there may be room to introduce additional taxes for this income group, creating a more balanced approach to taxation.

High-Income Earners

The top decile in Israel faces a tax rate that not only meets but surpasses the averages observed in other developed nations. This highlights a significant contribution from high earners in supporting the country’s economy.

Potential for Tax Reform

The Bank of Israel has hinted at the possibility of increasing direct taxes on middle-income earners, aiming to address disparities in the tax system. Such reforms could help in redistributing wealth more equitably across the population.

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