The three main “edicts” that the government is imposing on Israelis this year will significantly increase the number of poor, it was announced Tuesday. The announcement was not made by an anti-budget cut politician, but by the National Insurance Institute, which supplied charts, graphs, and studies to back up its claim.
Beginning next week, Israel's Value Added Tax (VAT) is set to rise by 1%, to 18%. Income tax rates will also rise this year, with more people paying more taxes in the lower income brackets. And, the government plans to cut National Insurance child payments, a move that will impact negatively on the poor and working class, the NII said.
The increased expense and the lower income will propel some 19,460 families below the poverty line. About 90,000 people, including some 44,000 children, will be affected, according to NII economists. A top economist in the NII said that “based on the three economic steps planned by the government, poverty will increase, by about 14% overall.”