Trajtenberg: No alternative to tax hikes

Prof. Manuel Trajtenberg: Raising VAT by 1% is not enough. If you want to increase spending, you have to pay for it.

"We have commitments, defense constraints, and little freedom of movement," Prof. Manuel Trajtenberg told the Caesarea Forum today. "There is no help for it. There is no choice but to permanently raise taxes in Israel. It was good that the social protest put an end to the tax cuts program. We must permanently raise taxes, even if we're going to have a deficit target of 3% of GDP. The difference between 2.5% and 3% isn't great; we must permanently raise taxes."

Trajtenberg added, "Raising VAT by 1% is not enough. We must tell the Israeli people the truth: if you want to increase spending, you have to pay for it. That's the message."

Commenting on Saturday night's riot at a social protest demonstration in Tel Aviv, Trajtenberg said, "Someone must translate the street's demand into concrete measures. If you're not happy with the current political parties, set up new ones. It was very painful to see what happened on Saturday night. I'm still scared and I cannot free myself of my childhood fears (during the Argentinian dictatorship)… of getting hit. We don’t want our children to have such memories of violence, we must return to ourselves and express our positions peacefully."

Published by Globes [online], Israel business news - www.globes-online.com - on June 28, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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