Israel Subsidizes High-Tech Firms, With Mixed Results
Intel Israel received outstanding grants from the state but has not generated the much-awaited change in the socioeconomic structure of nearby towns, nor a revolution in their education systems.
Over the past year, there has been huge commotion in Israel over the unique status enjoyed by a handful of high-tech factories. It all began once it became public knowledge that most of these factories pay no income tax, while most citizens struggle under the tax burden. Israelis everywhere are asking how it came to be that people with more pay less, and people with less pay more.
The commotion intensified once it became known that in the past few years these very factories received tax exemptions for profits amounting to 122 billion shekels ($34.5 billion). The public regarded this as a case of exploitation and greed by those companies’ managers. The state argued in its defense that these factories employ tens of thousands of workers. Collecting taxes from these companies could harm them and even cause them to relocate to other countries.
