The Treasury was reported today to be preparing an austerity economic program in an oil-out attempt to fight inflation. According to Yediot Achronot’s economic correspondent, the plan, designed to soak up some IL 10 billion annually, includes a five percent levy on income tax, in effect a tax on taxes.
Finance Minister Simcha Ehrlich promptly denied that there was any move to increase taxes. He insisted there were no new economic plans at this time and that he has not even studied working papers for any. The Yediot correspondent said the plan is still in its initial stages and probably would undergo a number of changes before it is approved. Some observers suggested that it was deliberately leaked in outline to test public reaction.
The program calls for cuts in the State budget, reduced subsidies for various economic enterprises, the sale of public lands, a freeze on public construction and on the number of government employes and linkage of government-financed mortgages to the cost-of-living index. The most controversial item is the proposed levy on income tax.
The Treasury explained, according to the Yediot Achronot report, that the plan is not to in crease taxes as such but to impose a five percent levy on existing tax rates. A tax bill of IL 1000 would, for example, carry an additional payment of IL 50.
the Likud Knesset faction urged the government yesterday to prepare a comprehensive socio-economic plan for the next two years. MK Haim Kotman who introduced a resolution to that effect, said it was intolerable that the faction be kept in the dark as to what the government was doing in the social and economic fields.
The Likud MKs also decided to submit on agenda motion to take legal action against yordim (Israelis who emigrate) who rent apartments they purchased with government subsidies at an excessive price to the new tenants. Dov Shilansky who raised the issue said many yordim bought apartments with government supported loans before they left the country and are now reaping large profits. He proposed legal action to deprive them of the property.
DULZIN CALLS FOR CONSTRUCTION FREEZE
Meanwhile, Leon Dulzin, chairman of the Jewish Agency and World Zionist Organization Executives, called on the government today to freeze all public construction, except defense construction, and freeze luxury apartment construction so that construction efforts could focus almost entirely on the needs of olim and poorly housed Israelis. Dulzin told a meeting of the WZO Executive that he would make his proposal formally at a meeting later this week with Premier Menachem Begin.
Rafael Kotlowitz, chairman of the WZO Aliya Department, warned that any and all aliya plans would be doomed to failure unless the housing bottleneck for olim is broken.
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The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
