Skip to comments.In Israel, business takes the lead
Posted on 03/14/2010 4:49:10 AM PDT by AlanD
The global high tech sector have again started to boom, benefiting Israeli manufacturing. Because of the free market reforms and the radically reduced need for counter-terrorist military operations after the completion of the security fence, military spending has been reduced, enabling the government to reduce the budget deficit and also cut taxes. spending and tax rates are now lower than in Western European countries, even including military spending, and even more so excluding it. And after the Bush tax cuts expire next year, the top income tax rate (at 45%, scheduled to be reduced to 44% in 2012 and 39% in 2016) will be lower than in many American states, including California and New York. And the corporate income tax rate will be lower than in all American states.
The causes of the general orientation towards free markets include that after the Israeli economy hit the wall in the 1980s, it became evident for most that the Israeli economy needed reform. Similarly, the dismal results of the Kibbutz communities more or less compelled them to become more market oriented. Another reason is Benjamin Netanyahu as a person. He has agitated for free market reforms relentlessly since the early 1990s, and given the influence he has had (as Prime Minister, Finance Minister and pundit) since then this is a key reason for the transformation. Netanyahu has even expressed a vision that Israel should try to become "the Hong Kong of the Middle East" (referring to Hong Kong's reputation as the freest economy of the world).
Israel may still be far away from Netanyahu's long-term vision of becoming a "Hong Kong of the Middle East", but it has in fact gradually moved in that direction since the 1980s, and as a result it has enjoyed an economic boom most of the time
(Excerpt) Read more at csmonitor.com ...