More on Israel's 'Wealth Gap'

http://www.futureofcapitalism.com/2011/08/more-on-israel-wealth-gap

That front-page New York Times article about 'Israel's Wealth Gap" was the topic of an earlier post here noting that "Infuriatingly, the Times article provides no link to the Bank of Israel study" it cited about the concentration of wealth in Israel. One of our Israel-based reader-community member-participant-content co-creator-watchdogs has now helpfully provided a link to the report, which is in Hebrew and was published in April 2008, or more than three years ago, which raises the question of why it's a matter of such urgency for either Israeli protesters or New York Times editors right now. There's also an English-language chart in this Bank of Israel report, on the page numbered 172, or 16 of the PDF.

It's also worth dissecting the following paragraph from the Times article:

"These are called pyramid schemes because through shares in one company they take control of a second company and, through that, of another one on down a chain of holdings," said Eytan Sheshinski, an economist at the Hebrew University of Jerusalem. "They are able to move profits through the pyramid, which cannot happen in the United States because of the tax system there."

The same Israel-based reader-community member-participant-content co-creator-watchdog points out that these profits are "moved" via dividends, with a 15% tax withheld at each distribution and minority shareholders getting the same deal as the "tycoons." It's not obvious what's unfair or wrong with this.

Second, it's true that Eytan Sheshinski is an economist, but what the Times doesn't mention is that he was the head of the committee, that, after a big gas find in Israel, recommended more than doubling the taxes on oil and gas production in Israel, to 60%. It was named the "Sheshinski Committee."

by Ira Stoll  |  Aug 18, 2011 at 11:26 pm Related Topics:  Energy, Income Inequality, Press, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list