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Netanyahu: a firm advocate of lower tax By MATI WAGNER Feb. 27, 2003 (JPost) While competing against Prime Minister Ariel Sharon for Likud leadership in December, Benjamin Netanyahu, launched a campaign focusing on economic issues. In stark contrast to most politicians, Netanyahu, who studied economics at MIT, has an extensive, detailed economic program that spans all aspects of policymaking. He expressed his economic views at various business-oriented functions. The centerpiece of Netanyahu's program is a gradual reduction of income taxes to no more than 35 percent over the next four years. This is the optimal level according to many economic studies, he said. As a supply-side economist, Netanyahu holds that budget cuts and higher taxes are not the solution to economic deterioration. Instead, tax cuts should be implemented to spur investments which will encourage growth. He said that by increasing growth by 2% would add NIS 10 billion to gross domestic product and expand tax collection without raising taxes. Netanyahu has also promised to take steps to replace bureaucracy with a free market. The new Finance Minister was quoted as saying that economic growth is not necessarily conditional upon a resumption of the peace process. "South Korea and North Korea have been wracked by diplomatic and military conflict for decades. But South Korea managed to flourish because of its greater degree of freedom, while its rival North Korea foundered into abject misery," Netanyahu said in an interview. He argued that free markets are more important as a catalyst of growth than science, education and technology. Israel is the most bureaucratized, and centralized, of world economies that generate GDP exceeding $10,000 per capita, he said. All we need is to "release the spring" by eliminating bureaucracy. Netanyahu has also said statutory bodies such as the Israel Lands Authority and the Planning Authority should be forced to streamline their decision making process. Privatization should be used to reduce the size of the public sector. He supports floating State-owned companies on the stock exchange. At one public appearance Netanyahu commented that "the real finance minister in Israel is the Prime Minister". Benyamin Netanyahu pushed for economic liberalization that he said would facilitate Israel's participation in the global market during his stint as prime minister, from 1996 to 1999. Dan Meridor, Yaakov Neeman and Meir Sheetrit served as finance ministers during this period and Jacob Frenkel was governor of the Bank of Israel. As Prime Minister, he shifted the Government Companies Authority from the Treasury to the Prime Minister's Office. Still, it was the Treasury, not the Prime Minister, who privatized Bank Hapoalim. This was the only major privatization that took place during Netanyahu's three-year term. This week, during negotiations with Prime Minister Ariel Sharon, Netanyahu asked to restore the Government Companies Authority to the Treasury as a condition for receiving the Finance portfolio. Shortly after becoming Prime Minister, Netanyahu's government backed the Treasury's NIS 4.7b. cut in the 1997 budget, to reduce the deficit to 2.8% of gross domestic product. Netanyahu lost the 1999 elections due, in part, to Israel's economic deterioration and high unemployment. However, economists who worked in Bank of Israel and the Treasury during Netanyahu's stint blamed the preceding Rabin-Peres government for the economic ills. Netanyahu often complained that he inherited the effects of Avraham Shohat's spendthrift fiscal policy. Two key reasons for the economic slowdown while he was in office were a downturn in the economic cycle, and a decline in immigration from the Former Soviet Union, economists said. Netanyahu fostered good relations with Bank of Israel. Siding with Bank of Israel against his Finance Minister Dan Meridor, Netanyahu spearheaded liberalization in the currency market. Meridor resigned after he lost Netanyahu's support. One Bank of Israel official who worked with Netanyahu while he was prime minister remembered, "He always understood economic theories that I talked about. He received an economy with a dangerous deficit in the balance-of-payments and the budget. He managed to improve both. This is one of the main reasons why Israel succeeded in weathering the economic crisis of 1998." Netanyahu supported the Levin Committee's recommendations to strengthen Bank of Israel's independence. Former Supreme Court judge Dov Levin, who has since passed away, revamped legislation dating back to 1954. However, Netanyahu's government fell before the recommendations were implemented |
The Case Agianst Israel's Enemies by Alan Dershowitz 
Coming from England and particularly from the BBC, MUST BE SEEN VIDEO! ANOTHER MUST SEE VIDEO |