ABSTRACT
The income tax reform in Israel that was introduced in August 1975 bridged two ostensible objectives: the enlargement of levying and the provision of a redistributive mechanism. In other words, it aimed to establish a system that would simultaneously achieve economic efficiency and social justice. The reform was unique since it invented an original Credit Points mechanism that linked together efficiency and distributive justice.
Introducing the Value Added Tax a year later was also justified as an indirect progressive tax that could be related to as a business tax rather than as an expenditure tax, levied directly on customers. One of the main concerns of the leading academic economists during that period was the enlarged socio-economic gap. Hence, the two tax reforms were also justified by pro-social arguments.
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Notes
1. Lifshitz, Economics of Defense, 89.
2. Buk, Netel Hamisim Beyisrael uVaolam, 27.
3. Ben-Porath and Bruno, “Political Economy Tax Reform,” 286.
4. Ibid.
5. Hamlatzot Leshinui Hamas Hayashir, December 15, 1974, 3.
6. Ibid., 4.
7. Ibid., A1, A8.
8. Ben-Porath and Bruno, “Political Economy Tax Reform,” 294.
9. Ibid., 295.
10. Ibid., 298.
11. Ibid., 300.
12. Hamlatzot Leshinui Hamas Hayashir, A-26.
13. Ibid., A-21.
14. Ibid., A-21a.
15. Ben-Porath and Bruno, “Political Economy Tax Reform,” 289.
16. Bruno and Habib, “Taxes, Family Grants Redistribution,” 57.
17. Itzhaki, “Tax Programming Model,” 107–8.
18. Colm, “The Ideal Tax System,” 327.
19. Ibid., 328–9.
20. Ibid., 329.
21. Studenski, “Towards a Theory of Business Taxation,” 654.
22. Salo, “The Ideas of Mauric Laurè,” 132.
23. Morag, “Mas Erech Musaf,” 67–73.
24. Doch Havaada Be’noseh Mas Erech Musaf, 4.
25. Ibid., 8.
26. Ibid., 9.
27. Lerner and Ben-Shahar, The Economic Efficiency and Growth, 145.
28. Kleiman, “Haeem Anu Hevra Sheevioneet?”.
29. Kleiman, “Madua Lo Katen Hapaar?”.
30. Bruno, Maariv, November 17, 1972.
31. Bruno, Emda, October, 1974.
32. Knesset General Assembly, May 26, 1975.
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Yair Barak
Yair Barak is a doctoral student at the Cohn Institute for the History and Philosophy of Science and Ideas, Tel Aviv University.