Government Intervention Damages Economy
The problem with Israel’s major pharmaceutical concern, Teva, which is downsizing and firing thousands of employees after some major losses, is not the low tax that it paid. The problem is that small businesses (that employ many more people than the spoiled low-tax corporations) pay much, much more.
Teva did not get anything from the State. It just paid less of its revenues to the State. It is reasonable to assume that if Teva had to pay taxes like the barber shop on the other side of the street, it wouldn’t exist in Israel and its workers would not be fired now because they wouldn’t have been employed in the first place.
The real solution is a flat tax – low and equal for everyone, and the elimination of the oppressive Israeli regulation that prevents small businesses from opening
On one hand, we cannot blame Teva. Its purpose is to make money. On the other hand, Israel’s economy will manage much better and provide an abundance of employment opportunities (including in the periphery) if the Finance Ministers will stop trying to find magic employment solutions in the form of giant corporations who “do us a favor” in exchange for tax breaks.
Don’t give us employment. That is not the job of the government. Instead, downsize the government apparatus from 29 ministers to 11 (as we have detailed in the Zehut platform). That way, you will be able to manage with much less tax and to give the small businesses what you gave to Teva.
The economy will flourish, new business will open and employment will come without favors from the government.