Israel's mega-rich: 50+, tight-fisted, male

Mega-rich  image: Shutterstock

The Chief Economist's survey of Israel's 400 highest-income people for 2014 shows that charity is not a prominent characteristic.

A 57-year-old male who lives in Tel Aviv and doesn't give to charity - that is the most common profile of the 400 highest income people in Israel in 2014. According to the Chief Economist and State Revenues Department at the Ministry of Finance, only 8% of the 400 were women. At the same time, the especially high earnings of some of the women meant that the average income of the women in the mega-rich list was higher than that of the men.

This is the second year in which the Chief Economist's Department has published its analysis of the highest income people in Israel (the previous survey was for 2013). The analysis is based on data from the Israel Tax Authority to which the Ministry of Finance has exclusive access. The survey relates to personal income only, so that if, for example, a company controlled by one of the mega-rich doubles its value and distributes a NIS 1 million dividend to its owners, only the dividend will be counted as income.

Entry into the 400 club in 2014 required an annual income of NIS 12.8 million. The average income of the 400 was NIS 40.6 million, 10% more than in 2013. The average rate of direct taxation (income tax, national insurance, and health tax) was 30.9%.

It turns out that many of the mega-rich are misers when it comes to contributing to society. Of the 400, 165 donated an average of NIS 280,000 each. The remaining 235 donated nothing at all from their own pockets.

In the population at large, 53% of taxpayers are men. In the mega-rich club, the proportion of men is 92%, 3% more than in the previous survey. On the other hand, whereas in the general population men's income is 67% higher than that of women, among the mega-rich matters are the other way around: men's income is on average only 86% of the women's. This is because of a few women with especially high income. When it comes to the median income, the men are ahead, with NIS 22.8 million, compared with NIS 18.6 million for the women.

The main source of income for the mega-rich is their capital. Capital gains represented 47.4% of their total income in 2014 (which compares with just 3% for the general population), with monthly salary accounting for just 6.7% (compared with an average of 77% for the general population). Two other main sources were dividends (25.4% of total income), and interest (10.5% of total income).

The Chief Economist Department's survey was inspired by the survey published by US magazine "Forbes" of the 400 highest income people in the US. The latter enjoy incomes far higher than those of the Israeli 400. The average income of those on the Forbes list for 2014 was NIS 1.2 billion in shekel terms, 29.5 times the Israeli 400 average. If, however, the Israeli list is adjusted for relative population size, and only the ten highest income people are considered (the population of the US being 40 times larger than that of Israel), the gap falls to just 2.7 to 1.

The generosity of the mega-rich is not much greater than that of the population at large. The proportion of contributors among the mega-rich is 41%, compared with just 1% in the general population, but the average amount donated by the mega-rich, at NIS 280,000 annually, is not much higher as a proportion of their incomes than that of the general population, for whom the average annual donation is NIS 3,300. Donors among the mega-rich donate 0.8% of their income, while for the total population the proportion is 0.5-0.8%.

Published by Globes [online], Israel business news - www.globes-online.com - on July 15, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Mega-rich  image: Shutterstock
Mega-rich image: Shutterstock
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