Tax Reform for Israel
High Israeli tax rates are a disincentive for work and investments, and actually reduce state tax income. Graduated progressive rates penalize the most productive individuals in the economy. Since 1994, countries in Eastern and Central Europe have adopted flat rate tax reforms that eliminated graduated tax rates. These countries experienced significant increases in economic growth, foreign investment and income from taxation.
As such, this research recommends that Israel learn from the rapid economic growth achieved in every country that has adopted a flat tax system, and switch to one low tax rate on business and personal incomes, with an exemption for low income populations.