Givaudan Schweiz AG
Israeli Corporate Tax Policy
Report

Israeli Corporate Tax Policy

A Pro-Growth System at Risk

Alex Brill
AEI, 2013
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Editorial Rating

6

Qualities

  • Analytical

Recommendation

Alex Brill, a fellow of the American Enterprise Institute, argues convincingly that Israel will end up as a foreign direct investment backwater, despite its current success in that realm, if it continues to pander to the tax-’em-high camp. He demolishes the idea that higher taxes will help Israel’s budget, arguing that taxing investments is counterproductive and risks leading to even deeper debt. getAbstract commends this paper for its insightful analysis.

Summary

Capital and investment have never been more mobile, and competition for foreign direct investment (FDI) has never been tougher. Israel – a modest-sized, open, export-oriented nation – picked a bad time to undermine its pivotal corporate tax regime with a 1% hike. For smaller, more open economies, a competitive tax code attracts FDI. For years, Israel steadily reduced its corporate tax rate and encouraged inward and local investment. The coalition government is harming Israel’s competitive edge by planning to raise several corporate tax rates. Finance minister Yair Lapid is leading the effort to cut the deficit and reduce...

About the Author

Alex Brill has served as policy director and chief economist for the US House of Representatives Committee on Ways and Means.

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