The tax team of the Trajtenberg committee is considering whether to extend the child tax credit to fathers, at least in part, either instead of or in addition to the tax credit awarded to mothers.
Israel Tax Authority director general Yehuda Nasradishi and National Economics Council chairman Prof. Eugene Kandel head the committee's tax team.
The Income Tax Regulations and directives stipulate credit points for women for their children in order to encourage mothers to work. However, since women's salaries are, on average lower than salaries for men, even for the same job, many women do not reach the tax threshold are therefore ineligible for the tax credit at all.
The Income Tax Report for 2010 found that 38.2% of men earned less than the tax threshold, compared with 66.8% of women. The Trajtenberg committee tax team is seeking a just way to enable a family to benefit from the child credit.
For example a family with two children in which the mother earns NIS 5,000 a month and father earns NIS 10,000 is ineligible for the child tax credit. Transferring the tax credit for the two children from the mother to the father would increase the family's net income by hundreds of shekels a month.
Transferring the child tax credit from mothers to fathers would help poor and middle class families where the mother earns a modest salary or has insubstantial work.
The proposal to transfer the child tax credit was made by a group of accountants, salary managers and labor lawyers headed by Eyal Manlawi at the Kiryat Ono Academic College. He also proposes a negative income tax for working mothers who do not meet the threshold for the child tax credit.
The Trajtenberg committee tax team is also discussing tax recognition for daycare expenses for women. The same problem with the child tax credit applies here as well: many mothers, including in the middle class, do not meet the income tax threshold to benefit. Only a few highly paid women would substantially benefit from such a tax break.
The Trajtenberg committee is therefore focusing on sharing the tax breaks for children between parents of the same family unit, so that the benefits will not be the exclusive domain of mothers, and fathers can at least partly benefit from the rights either instead of the mother or together with her.
Published by Globes [online], Israel business news - www.globes-online.com - on August 30, 2011
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