Why, exactly, have Israelis been ordered to pay Netanyahu’s taxes?
It’s hard to see why PM’s bill should be protected from the scrupulous attentions of the tax authority and summarily reduced just because he has a loyal majority on a Knesset panel
David Horovitz is the founding editor of The Times of Israel. He is the author of "Still Life with Bombers" (2004) and "A Little Too Close to God" (2000), and co-author of "Shalom Friend: The Life and Legacy of Yitzhak Rabin" (1996). He previously edited The Jerusalem Post (2004-2011) and The Jerusalem Report (1998-2004).
The way the Likud’s Miki Zohar told it, in an Army Radio interview on Wednesday afternoon, Israel’s heartless tax authority was bent on turning Prime Minister Benjamin Netanyahu into a veritable pauper.
The evil taxman was demanding hundreds of thousands of shekels in back taxes from Netanyahu, said Zohar, the coalition chairman, and was threatening to “impose a lien” on his assets unless the money was paid immediately.
What?! Really?! The tax authority was about to place a lien on the prime minister’s assets in the middle of the coronavirus crisis, asked the incredulous interviewers. Zohar appeared to backtrack a little. Well, they were insisting Netanyahu had to make the payment right away, he said.
And that, continued Zohar, was why the Knesset’s powerhouse Finance Committee had been compelled, in the middle of the gravest economic crisis in modern Israeli history, to spend hours on Tuesday debating Netanyahu’s request for almost a million shekels ($270,000) in tax rebates and benefits. This on a day when the latest figures showed the unemployment rate at a staggering 20.8%, and as social workers and theater staffers took turns holding what have become daily demonstrations by Israel’s battered workforce against the government’s financial policies in response to the virus.
‘Nobody knows exactly’ how much
Forgive us if we haven’t reported exactly why Netanyahu was granted almost a million shekels in tax rebates and benefits by the committee.
We understand the sums apparently relate chiefly to renovations at his private home in Caesarea in the years 2013-2017 (at a reported cost of some NIS 600,000) and his use of the bulletproof prime ministerial car from 2017-2019 (NIS 324,000). But the specifics have proven hard to pin down.
Are these all costs that were incurred in the fulfillment of his office? The use of the car plainly was, but don’t all Israelis who have company cars pay a tax on that benefit, and is Netanyahu now being exempted, and retroactively too, from any such payment? As for his Caesarea home, do the rebates relate to necessary upgrades for security purposes or, as a Channel 13 report indicated, fixing up the pool and gardening work? Is the Israeli taxpayer funding hedge-cutting and lawn-mowing at the prime minister’s private residence?
Crucially, too, were these rebates sought by, and granted to, previous prime ministers — as Zohar and Netanyahu’s Likud party have insisted is the case?
The inability to specify what the Finance Committee approved, and why, stems in part from the fact that the head of the Israel Tax Authority did not appear before the panel to explain the retroactive benefits Netanyahu was (successfully) seeking, and the representative of the authority was unable to satisfactorily answer questions from the committee chair, United Torah Judaism MK Moshe Gafni.
It is further complicated by the fact that Tuesday’s lengthy discussion predictably deteriorated into a shouting match.
Zohar protested what he claimed were relentless efforts to cripple Netanyahu economically, leaving him “unable to get through the month.” Other Likud loyalists also asserted that their rivals were seeking to impoverish Netanyahu — whose monthly pretax prime ministerial salary is a substantial though hardly colossal NIS 56,345 (a little over $16,000), but many of whose bills (including food, electricity, city taxes and more at his official residence) are routinely paid by the state, and whose net worth was estimated by Forbes magazine last year at NIS 50 million (approximately $14 million). And those rivals countered that the prime minister was seeking outrageous personal benefits never granted to any previous prime minister. (The hapless taxman at the committee session was unable to say whether this last assertion was true.)
Regarding the rebates ultimately awarded to Netanyahu — in an 8-5 vote along predictable partisan lines — it seems hard to understand why the prime minister’s tax bill should be protected by a Knesset decision from the normal, scrupulous assessment of the Israel Tax Authority, and summarily reduced simply because he has more loyalists than opponents on the relevant legislative panel. But again, we still don’t know the full picture.
Regarding the timing of the debate, however, and the decision to award Netanyahu considerable sums from the public purse at a time when the country is in economic meltdown because of the pandemic, it is worth quoting remarks made during the stormy debate by Bezalel Smotrich, a former coalition ally of the prime minister’s.
“The State of Israel is in the midst of a huge crisis — which every citizen is feeling in their pocket — perhaps apart from us, whose salaries continue to flow,” said Smotrich. “We harm ourselves when, on a day like this, after a year when the Knesset didn’t function and amid the COVID-19 crisis, we’re spending three hours discussing this. How do we look? I understand the need [to address this issue], but we can’t be so out of touch from the mood of the public.”
Smotrich, currently consigned to the opposition as a member of the Yamina party, abstained in the vote.
Opposition MK Micky Levy of Yesh Atid said “nobody knows exactly” how much Netanyahu is to receive because the committee had not been given an exact list of the benefits to be covered. “There are 800,000 people unemployed outside, and he wants a tax exemption,” Levy protested. Bizarrely, he then absented himself from the vote.
Committee representatives from the Blue and White party — which was established by now-Defense Minister Benny Gantz with the prime declared goal of ousting Netanyahu, and which changed course and joined forces in a unity coalition with the incumbent last month in order, said Gantz, to battle COVID-19 and protect Israeli democracy — chose not to attend the session at all.
Blue and White’s Meirav Cohen said Wednesday that this was to signal that the party did not approve of the timing of the debate.
Powerful stuff. Cohen, incidentally, is Israel’s new minister of — wait for it — social equality.
And there’s more
Next week, the Finance Committee is to convene again, this time to discuss benefits to be granted to Gantz, in his new status as Israel’s alternate prime minister — benefits which would, of course, extend to Netanyahu when and if he hands over power to Gantz in November 2021 under their coalition deal to “rotate” the premiership.
Speaking to ToI’s Shoshanna Solomon for an article published Thursday, Hebrew University politics professor Gayil Talshir warned that Netanyahu’s high-profile interest in his own financial well-being will backfire if he opts to renege on the deal with Gantz and call elections in the near future. “He will be playing with fire,” she predicted. “His voters are from the low-income classes and they are suffering. And they see that he just wants more and more of money from public taxes, and all he thinks about is himself… I think he will find a backlash against him.”
Yet opinion polls in recent weeks have shown anything but a backlash against Netanyahu — despite the COVID-19 economic collapse, and despite, or perhaps because of the fact that Netanyahu is currently on trial for corruption in a case he has depicted as an attempted political coup by leftists in the media, opposition and law enforcement. His Likud is polling at 40 or more seats, compared to its current 36, which would leave it well able to form a right-wing/ultra-Orthodox coalition without Gantz’s Blue and White party.
Aviv Bushinsky, a former spokesman for the prime minister and his ex-chief of staff at the Finance Ministry, noted Wednesday that Netanyahu is considering canceling next week’s Finance Committee session on the benefits to be awarded to the “alternate prime minister.”
Bushinsky speculated, however, that Netanyahu was not too concerned about any public backlash against him over his tax breaks. Rather, he mused, Netanyahu has no need for such a session if he doesn’t actually plan on relinquishing the premiership.
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An earlier version of this Editor’s Note was sent out Wednesday in ToI’s weekly update email to members of the Times of Israel Community. To receive these Editor’s Notes as they’re released, join the ToI Community here.
