Three papers discuss various economic issues regarding the decision of Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz, due to be voted on at today's Cabinet meeting, to enact a series of steps including raising VAT and income tax, raising taxes on gasoline, alcohol and cigarettes, imposing a surtax on high income earners and an across-the-board budget cut at Government ministries:
Yediot Aharonot says that the government, "which increased expenditures and lowered taxes, in contravention of all the recommendations it received from the IMF, the OECD and Bank of Israel Governor Stanley Fischer, is more than a little to blame for the consequences: State coffers are suddenly empty and the government is obliged to salvage the situation" by enacting the abovementioned steps. The author believes that "The problem is those who will suffer are mainly the innocent citizens. It is they who will pay more taxes, earn less and be forced to cope with fewer government services." The paper concludes by reminding Prime Minister Netanyahu and its readers, "If there were 18 ministers in the government, not 30, we would save NIS 120 million."
Ma'ariv suggests, "It is possible to understand and accept the decision to raise VAT," but adds, "What cannot be accepted at all is the raising of income tax rates. The decision unjustly hits at those who pay taxes and at growth, and the income supplement from this decision (NIS 1.2 billion) could have been derived from alternative sources that Netanyahu fears to touch." The author explains: "Thus, for example, the absurd VAT exemption in Eilat should have been cancelled long ago, saving NIS 450 million, but the Mayor of Eilat, who is close to the Likud, has done excellent lobbying. Alternatively, it could have been possible to consider partially cancelling the tax exemption for advanced training funds, thus saving NIS 2.4 billion. But here they are afraid of clashing with Histadrut [labor federation] Secy.-Gen. Ofer Eini." The paper contends, "Not having any choice, the Prime Minister has chosen the relatively easy solutio! n of hitting at wage-earners. This is painful in the short-term but Netanyahu is apparently counting on our short memories. A mere two weeks ago - does anyone remember? - there were those who set themselves alight due to the cost of living."
The Jerusalem Post writes: "A number of negative indicators have pointed to a coming economic slowdown and the urgent need for fiscal discipline. At a time when the economy is slowing, Prime Minister Binyamin Netanyahu’s government has instituted several major spending increases. While it is important for the government to maintain fiscal discipline, one cannot help getting the impression that the recent steps proposed to reduce the budget deficit were the result of hasty decision making. Raising VAT is the easiest way to quickly increase state revenues, but VAT is also a regressive tax that hurts the poor disproportionately. And raising income taxes for the middle class will only increase the burden on that section of society that is already struggling to make ends meet. Unfortunately, more ambitious reforms such as increasing competition in fields such as banking, food production and insurance or increasing efficiency at ! our ports, the Israel Electric Corporation or the public sector have been neglected."

Yisrael Hayom discusses Mitt Romney's meetings with Prime Minister Netanyahu and notes that candidate Romney, like candidates George Bush and Barack Obama before him, knows that "The road to the White House runs through Jerusalem, among other places." The author notes that all three candidates were warmly welcomed, "because it is clear the Israel-US relations need not depend on the party affiliation of the President," but suggests that the congruity of views between Romney and Prime Minister Netanyahu might make some people uncomfortable.
Haaretz writes: "It's no secret that the Republican candidate for president of the United States, Mitt Romney, took the trouble to come to Israel at the height of his campaign in the hope of winning support from Jewish voters and donors, as well as from the Christian right. Even though the visitor adhered faithfully to America's political culture, which forbids public criticism of a sitting president's foreign policy outside the borders of the United States, Netanyahu used Romney's visit to send a message about his lack of faith in Obama's Iranian policy of sanctions and diplomacy. If Romney is elected president, he will presumably follow in the footsteps of previous Republican presidents, who placed American interests ahead of both the ideology of the Jewish right and the policy of the Israeli right. Therefore, Netanyahu must serve Israel's interests by refraining from crude intervention in the American election campaign."!

[Gad Lior, Yehuda Sharoni and Boaz Bismout wrote today's articles in Yediot Aharonot, Ma'ariv and Yisrael Hayom, respectively.]