The average Israeli works for the government more than seven months of the year
Israel Insider
August 28, 2007

The Israeli economy's tax burden increased this year, reports the Jerusalem Institute for Market Studies, a non-profit economic policy think tank. Every agora earned by the Israeli worker went straight to the government's coffers until August 2. Falling eight days later than last year, only after working 214 days for the government does the Israeli population get to keep the money they earn. Tax Freedom Day marks the day when Israelis stop working for the government, and start earning money for themselves. It answers the question, "What price is the nation paying for government?"

"With Tax Freedom Day occurring nine days sooner in 2006 than the previous year, I had hoped that 2007 would be continue this trend and be an even better year for taxpayers. Unfortunately, we seem to have gone backwards and the trend is continuing. Tax Freedom Day will be even later next year based on the 2008 budget draft, the largest budget in Israel's history, just passed by the cabinet. This is bad news for Israel," said Corinne Sauer, director of the Jerusalem Institute for Market Studies, a non-profit economic policy think tank dedicated to promoting social progress in Israel through economic freedom and individual liberty.

"It is often joked that people spend more time working for the government than for themselves and their family. Unfortunately, in Israel, it is true."

Tax Freedom Day would have been even later if the government had not taken on additional loans, as loan burden is not calculated. Thus, the tax burden is even higher as increased debt and loan repayments, which make up 79 billion shekels (about $20 billion) in the 2008 draft budget, makes up an increasing portion of Israel's tax burden. "It's time we realized that loans are bad for the economy," said Sauer. "While they may provide short-term benefits they are paid back for generations."

In the early 1990s, Tax Freedom Day in Israel occurred in mid-July. For the past seventeen years, Tax Freedom Day has occurred later and later with only four exceptions: in 1996, 1998, 2003 and 2006. Since 1990, the first year in which calculations are available, in each and every year, Israeli taxpayers worked more for the government than for themselves.

Tax Freedom Day is the first day of the year in which a nation as a whole has earned enough income to fund its annual tax burden. Its calculations include both national and local taxes. Tax Freedom Day is observed in Israel later than in most other developed countries, representing a higher overall tax burden.

In 2007, the United States celebrated Tax Freedom Day on April 30, 95 days before Israel. In the United Kingdom, it was observed on June 1, 63 days before Israel. Even Norway, known for its high tax burden, observed Tax Freedom Day five days prior to Israel, on July 29. Tax Freedom Day even comes later in Israel than in formerly communist countries, such as the Czech Republic, where Tax Freedom Day was observed on June 11, 53 days before Israel. Estonia marked Tax Freedom Day on April 24, 101 days before Israel.

"Israel's high tax burden can not be solely attributed to the security situation," said Sauer. "Despite a socialist past, the economic liberalization of the formerly socialist countries of Eastern Europe proves that a lower tax burden is possible. I hope that the government will soon realize that the one of the best ways to fight poverty is to reduce Israel's tax burden."