Property Tax of the Local Authorities in Israel: Comparison of Arab and Jewish Local Authorities

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This study examines the payment of property taxes to Jewish and Arab local authorities in Israel during the years 2003–2004. According to the Central Bureau of Statistics’ classification, the majority of Arab local authorities can be found in the lower socio-economic clusters. The low socio-economic position of the Arab local authorities is one of the difficult problems that the State of Israel must face, and it is therefore important to identify the causative factors. It can be assumed that one of the factors affecting this situation is the lack of budget funding. This study addresses one of the important budget sources – property tax payments. On examining the situation, it was found that income from property tax payments made to Arab local authorities is very low in comparison to that of the Jewish local authorities. The objective of this study is to identify the reasons for this low income, so that this information can then be used to help to deal with the problem accordingly. Up until 2003, the data available was inadequate. Consequently, in previous studies researchers were obliged to make a number of assumptions in order to compare the two sectors. The detailed database now available to researchers allows me to carry out this study without the previously used assumptions, some of which were too strong. The research shows that even when comparing local authorities of a similar socio-economic standing, the collection rate of property tax payments in the Arab sector was low in both the areas. This conclusion does not absolve the government from responsibility for the state of the Arab local authorities because in a welfare state, the government is supposed to transfer funds to the weaker sectors in order to compensate them for their lower socio-economic status

Keywords: Local Authorities, Payment of Property Taxes, Arab Sector
Stream: Economics and Management
Presentation Type: Paper Presentation in English
Paper: A paper has not yet been submitted.

Dr. Tal Shahor

Lecturer, economics, The Max Stern Academic College of Emek Yezreel
Mosav Yaad, Israel, Israel

Ref: I08P0438