Tax Questions


As your tax forms trickle in and you begin to think about tackling this year's return, you can be thankful for one thing: You're not an Israeli.

Though income tax rates in Israel are lower than they used to be, the numbers are still pretty startling. A marginal rate of 45 percent kicks in at roughly $28,000 a year, and the top rate of 50 percent applies to annual income above $51,000 or so.

In addition, Israelis pay 5 to 10 percent of their wages for national health insurance and a mandatory pension program; a 17 percent value added tax on just about everything they buy; heavy import duties on items such as cars and appliances; a municipal housing tax that can amount to thousands of dollars a year; and various other levies, ranging from property taxes to fees for legal documents.

The Museum of Taxes, a one-room collection of papers, photographs, and artifacts at the corner of Agron and King David Streets in Jerusalem, is supposed to make Israelis feel better about this burden. Run by the Ministry of Finance with support from something called the Association for Improvement of Tax Consciousness in Israel, the museum is aimed at "enhancing awareness of the need to pay taxes" and "accustoming citizens to obey the law in their daily lives, to bear their share of the burden of public duties, and to pursue social justice."

The collection is more interesting than you might think, though the connection between its theme and some of the items on display is tenuous. A few, including a set of Stone Age blades and spear points, are there simply because they were confiscated by the customs service, while others, such as pieces of bombs that damaged buildings later repaired by the government, are meant to illustrate the good accomplished by taxes.

Despite such heavy-handed boosterism–pretty much what you'd expect from a government that issued gold and silver medals to mark the 50th anniversary of Israel's income tax–the museum aspires to scholarship, not merely propaganda. "We assume that knowledge is a prerequisite for understanding," writes museum director Avraham Mande'el, "and that understanding is a prerequisite for willingness to obey the law."

But the understanding that Mande'el wants to foster requires a sunny perspective that few are likely to share. "There is no area in the life of a nation and its inhabitants that does not find some expression in a certain tax or other," he enthuses, apparently unaware that some people view that fact with concern.

"At the very dawn of history," Mande'el writes, "the theme of taxes emerges in its embryonic form: a gift-offering to God." The state as God: another alarming notion that Mande'el passes over without comment.

Mande'el's blinkered view of taxes is also apparent in his misleading summary of King Saul's rise to power: "When [the Israelites] asked Samuel to appoint a king over them, he informed them of the royal prerogatives, including the tithe." Actually, Samuel strongly opposed the Israelites' request, warning them that a king would conscript their children as soldiers and servants, give the best of their fields to his cronies, and seize a tenth of their crops and flocks.

"And ye shall be his slaves," Samuel predicted. "And ye shall cry out in that day because of your king…and the Lord shall not answer you." This is hardly an endorsement of taxation as a ruler's "prerogative"–and the 10 percent rate that so worried Samuel is nothing compared to the chunk taken by Israel and other modern states.

Distinguishing between such confiscation and outright theft is no easy matter. That much is apparent from the museum's look at the history of taxation, which includes references to the tribute demanded from subjugated peoples, the special levies imposed on Jews in medieval Europe, and a 1940s campaign by Jewish leaders in Palestine against payment of British taxes.

Since not all taxes are morally justified, when can they be rightfully resisted? The beginning of an answer can be found at the museum, in a 1949 letter from two Israeli revenue officials to the nation's first finance minister.

"There is no hope the public will cooperate if most of the expenditure of the government's budget will go for salary payments," they wrote. "The taxpayer will undertake a heavier burden only if he actually gets services in exchange for his payments." A radical idea, then and now.