One week revealed everything: the harsh claims against Netanyahu, the conscription law, and the money for the Haredim

Off the rails. One of the most amusing things this week, and there is no shortage of them in the Netanyahu government, was the leak and the subsequent interview to the media, according to which Benjamin Netanyahu will lead a real conscription revolution immediately after the elections: anyone who does not study will be thrown into prison — and the plan will be implemented through a broad national government. You know what? Either irony is threatening to commit suicide, or Netanyahu has reached the conclusion that we are all idiots. If you are interested in conscription, then do not wait even a second — on this matter, the opposition is behind you.

Whoever tore off his mask was the chairman of Yisrael Beiteinu, Avigdor Lieberman. Given the importance of conscription, he called on Netanyahu not to wait until the elections, but to immediately convene the Knesset and pass the law. Of course, Netanyahu ran away, just as he ran away on this matter during the vote in the Knesset.

The current spin died completely when Netanyahu ordered the Knesset Speaker, Amir Ohana, to convene the Finance Committee for a controversial meeting during the recess to pamper the Haredim with an additional 360 million shekels, of which 268 million shekels are for Torah institutions and exempt institutions that do not teach core studies. Ohana was really burning to loot another few hundred million shekels for nothing, 80 days before the elections.

The opposition petitioned the Supreme Court, but the wagon is moving, there is no stopping it. The spin of the current "conscription law" exposed Netanyahu in his nakedness. Everyone already knows who they are dealing with. Or not. Preserving the bloc for him is everything, and all the talk about a conscription law, imprisonment, and more is an insult to intelligence — even of the Bibists. Ohana, the chairman of half the Knesset, is burning with the desire to please Netanyahu just before the primaries, which as of now will take place on August 17 — exactly ten days from now.

Netanyahu knows his flock, and he delayed the primaries as far as possible, in order to roast the Likud Knesset members and ministers on coals until then. Except for the discussion on transferring money to the Haredim, the Likud ministers danced to the tune of the Pied Piper who led them into the sea without a lifeguard, and within a few days their fate will be known. It is a collective suicide for the sake of the Prime Minister, reminiscent of a cult of addicts from South America. The ministers shed the remnants of self-respect, became enslaved to the talking points, and uploaded videos supporting Netanyahu's primary madness. In this state of affairs, it is better to take off the masks and hold a committee.

Meanwhile, in the race for the primaries, the ministers continue to humiliate themselves. Defense Minister Israel Katz fired in a live broadcast on the government channel Avi Bluth, the commander of the Central Command, and even distributed a video from which it appears that his security qualities are more or less like those of Joshua bin Nun. After all, he was already Herod when he was Minister of Transport. The chairman of the Foreign Affairs and Defense Committee, Boaz Bismut, opened the subcommittee discussions to the media in an unprecedented way, in order to film himself scolding the chairman of the Central Elections Committee, Supreme Court Justice Noam Sohlberg.

The most shameful show of humiliation is the proposal to appoint attorney Michael Ravilo, the family consigliere, as State Comptroller. The Supreme Court recommended that Netanyahu re-submit the appointment for a vote in the Knesset. He has ten days, because after the primaries every bastard is a king, and he will risk humiliation — and the revenge will come. Meanwhile, the Comptroller's Office is paralyzed, they are working there at full throttle in neutral. The publication of the Comptroller's report on the Nova victims is delayed. Also, whistleblowers have no one to turn to. In the king's court, there are also clowns like MK Avichai Buaron, who turned the Chief of Staff into someone who is conducting a political campaign against the government. And of course, how can one do without MK Galit Distel Atbaryan, who was good to the end in promoting a media law from the creative workshop of Yair Netanyahu, Benjamin Netanyahu, and Shlomo Karhi.

Now it is intriguing to see what work arrangements, in Israel or abroad, Netanyahu will try to organize before the elections for the Knesset members who were loyal to the end to the king and not to the kingdom and were eventually kicked out. The political spectacle that will take place starting from August 18 until the election date is going to be a hit. I am already ordering popcorn.

Lip service. The head of the Tax Authority, Shay Aharonovich, no longer hides what he really thinks about tax policy, and he is issuing a warning. "The exits of Assaf Rappaport and Eyal Waldman brought tens of billions of shekels into the country. The State of Israel owes a lot to these people," he said at a conference last week of "TheMarker".

Tax collection surpluses also stem from the thriving stock market, the obligation to issue invoices in a computerized manner, and the law on trapped profits. It is forbidden for the collection policy of the Tax Authority, certainly not in the current volumes, to be built on high-tech alone. The Tax Authority has much more important tasks, except that under the tenure of Finance Minister Bezalel Smotrich they have become impossible. On the contrary: in the current Netanyahu government, which claimed to deal with the cost of living and tax reforms, the tax burden on the average Israeli has increased in the last three years.

The truth is that Netanyahu does not care as long as he has money for the endless wars. How did the employees feel during this period in their pockets the increase in the tax burden? Income tax brackets and credit points were frozen until 2028 — which eroded real income by hundreds of shekels a year. National Insurance contributions for employees and employers became more expensive, and if the crisis in the National Insurance fund does not end, according to the warnings — in 2029 the fund will be empty.

VAT rose from 17% to 18% off the cuff. High-income earners were forced to pay a surtax of 2% on capital income. And I have not yet mentioned the taxation on undistributed profits and the additional tax on the banking system in the amount of 5 billion shekels. Why? Just because! These days we are informed about additional taxes in the field of property tax, and about the cancellation of the reform in the kashrut system, which in practice means an additional tax on business owners. This damage to the cost of living is the direct responsibility of the government, and no excuse about monopolies, supermarkets, or parallel imports will help.

Smotrich's direct path, backed by Netanyahu, to finance coalition funds for Haredi parties, Minister Itamar Ben Gvir, settlements, or institutions that encourage draft dodging, goes through your pocket. The government did not think for even a second how to make the ministries more efficient or how to stop the diversion of billions of shekels to the Haredim. Bibi simply does not count us, and it is time we understood that.

Therefore, a second after the establishment of the new government, the Tax Authority must submit to the Finance Minister — and it does not matter from which community — a reform to change the tax regime in Israel. What should the plan include? The first and main stage is deepening the collection of indirect taxes (mainly VAT). This is especially effective for populations that work "in black" and evade paying tax on wages.

Working "in black" is concentrated in Israeli cantons like Bnei Brak, which for some reason receive the title of city. This certainly happens in neighborhoods like Mea Shearim, which for them Israel is not on the map. The phenomenon repeats itself in minority settlements like Umm al-Fahm.

The simplest and most effective way to immediately increase tax revenues is to raise VAT by 2% to 20%. This is the VAT collected, for example, in a country like Austria, and it is thriving. Such a tax will create additional revenues of about 15 billion shekels per year. What can be done? VAT on cigarettes, alcohol, and other products sold in kiosks is the main way to reach the pockets of those who behave like stealth planes. It is painful, but it is much more painful when in Israel they reach a marginal income tax of 50% at record speed.

The second stage is a complete change in the priorities of direct and indirect tax benefits. In direct tax, tax incentives in the amount of 35 billion shekels for long-term savings should be reduced, where the main beneficiaries are mainly the top deciles. These deciles do not lack much more diverse ways of saving, such as investing in apartments — if not in Israel, then in Greece, Cyprus, or Portugal.

The housing sector requires further examination of taxation mechanisms. There is no reason for apartment owners to receive a tax exemption on an income of 5,654 shekels per month, while investments in the stock market are subject to tax. This exemption costs the state treasury about 4 billion shekels per year. The stories that canceling the exemption will jump the rent are fairy tales. Even so, the rent for new tenants is becoming more expensive every month by about 6%.

Finally, the issue of VAT exemptions also requires comprehensive change. It is mandatory to cancel the VAT exemption of 75 dollars on purchases abroad, and certainly not to get close to Smotrich's demand to double the exemption to 150 dollars. There is no reason in the world to encourage manufacturers from China and chains like TEMU, ALIEXPRESS, and others at the expense of manufacturers and merchants in Israel. In the world, they understood the principle a long time ago — and canceled the benefits.

And finally, one should seriously examine the cancellation of the VAT exemption on fruits and vegetables, as well as the VAT in Eilat. It is true that every budget period the cancellation of these exemptions was on the agenda — and every time it was canceled again due to political pressure. The exemption on fruits and vegetables is the most unnecessary, because anyway it does not roll into the consumer's pocket, and not once is it used as a tax laundry.

Encouraging tourism in Eilat should be done in other ways, and not by a VAT exemption that harms merchants in other settlements. For example, one can consider subsidizing flights to the city, better accessibility on Highway 90, greater competition in the hotel industry, or God forbid — establishing a casino in the city. Such moves will save the need for shopping and vacation flights to Cyprus, Greece, Albania, or the Balkan countries. And yet, to this list I would be happy to return a certain tax: the tax on sugary drinks and disposable utensils, which was canceled under Haredi pressure.

Changing the tax regime in Israel at the current timing is a one-time opportunity, which is doubtful if it will repeat itself. The last time it happened was in 2003, when Netanyahu was Finance Minister and changed the subsidy regime and imposed a tax on the stock market. The previous time was in 1975 — following the recommendations of the Ben-Shahar committee, which expanded the tax collection base and reduced its rates.

The current reform is mandatory, justified, and fair in light of the enormous challenges in the field of security that Israel faces, and first and foremost a defense budget that is supposed to approach 200 billion shekels in 2027. Such a reform is painful but not terrible. Even the Bank of Israel recommends raising taxes, but even there they will settle for changing priorities. In the Netanyahu government, the money arrived thanks to a ruthless tax pump and intentional neglect of dealing with tax collection matters among preferred populations.

Poster boy. In recent days, estimates are spreading again that Moshe Kahlon, the former Finance Minister, is making his way back to politics. There is no doubt that in the current political arena, Kahlon is a super-brand. Every party would be interested in being blessed with him, especially on the right side of the party. Let's start with Gilad Erdan, who as of now has not yet decided where he is headed, and in the meantime is busy with Scrabble games. Another station that has come up in recent days is Kahlon's return to Likud. Within the framework of the reservations that Netanyahu received, the Prime Minister is on an energetic search for former members, but the success is not great.

Moshe Kahlon in this sense is an invaluable asset, especially when it comes to cost of living issues. He is the only hope of the Netanyahu coalition, which has been nullified in the last three and a half years. Kahlon from Netanyahu's point of view is perceived as the current savior. He is the only Finance Minister who left his mark so significantly on the economy, and I am not talking only about the cellular reform, which cut prices by hundreds of shekels.

When the large food manufacturers were about to raise prices before Passover, the Finance Minister summoned them to his office, slammed their heads together — and in the end prevented the move. Do you see the possibility that Smotrich will make such a move? He tried it on the issue of parking rates, and the result was a jump of tens of percent in the price. In today's terms, Kahlon is considered the last of the Likudniks. He defended the judicial system fiercely over the years, and even confronted Netanyahu on the subject. Security and the IDF were a guiding light for him, and when he sees what is happening today with the various conscription laws — he breaks into a hollow laugh.

In short, there is no chance that Kahlon will return to Likud as long as Netanyahu serves as the dictator of the party, but in politics everything is possible. I have not spoken to him recently, but in my opinion, he will look for a much more comfortable political host, and Gadi Eizenkot and his party fit him perfectly. And finally, towards the end, one cannot ignore the elephant in the room — and that is the criminal accusation against Kahlon in the Yunit Credit affair, which ended in a plea bargain that included a suspended sentence and a fine. The intriguing question is whether the court or the Elections Committee will allow him to return to politics without a stain. In the current situation, where so many Knesset members or ministers in Likud are suspected of something (and in Likud it is an advantage), Kahlon is considered an innocent lamb.

Regulatory damage. If you want to understand where one of the basic problems in the field of cost of living is, visit the Competition Authority office in Jerusalem managed by attorney Michal Cohen. They talk about her a lot, but they do not understand how much she is an obstacle in the wheels of the business sector, and this has a huge financial meaning. More than that, she delays moves intended to encourage competition and lower the cost of living.

About a year ago, on September 19, 2025, Discount Bank signed a deal to sell the credit card company Cal to the Union Motors and Harel Investments group for about 4 billion shekels (assuming an "upside" in the deal). As of the morning of August 7, 2026, the deal has not yet been completed — because of a variety of legal excuses and the piling up of difficulties by the Competition Authority. The current obstacle concerns the continued operation of Cal's customer club with Shufersal and the question of whether the buyers — and especially George Horesh, the owner of Union Motors who holds a stake in Super-Pharm — will not exploit the customer database.

Let us recall that Discount Bank did not volunteer to sell Cal, but was forced to do so as part of an unprecedented separation of credit card companies from banks. Discount was the last to separate, after receiving a two-year extension. The separation of credit card companies from banks, it was explained, was intended to increase competition in the economy. And here before us is a Competition Authority whose main role is to increase competition in the economy, and it is blocking with its body the completion of the deal because of a variety of regulatory excuses.

A year has passed since the signing of the deal, and the great luck is that the buyers have not yet gotten cold feet and they are still interested in Cal. And what was done in the last year when Cal was on the shelf? At the same time, competitors tried to bite into Cal. The prominent deal is the loss of the Fly Card flight club in favor of the Isracard company.

However, Cal, managed by Yafit Griani, did the unbelievable — and gave a fight to the credit card companies Isracard and Max. In response to the loss of the Fly Card customer club, Cal established right under their noses the Fly All customer club and stunned the competitors, who announced no less than the distribution of free flight tickets. And yet, patience also has an end, and Cal's buyers cannot wait endlessly for the approval of the deal to add another legal clause.

Let us recall that Cohen already created a similar difficulty for the Harel company of Yair Hamburger, who asked to purchase Isracard. Out of despair, he withdrew from the deal. One more time he will not be able to hold on, so why test his nerves? The Competition Authority did everything in the last year except encourage competition. It stuck a number of deals in the wheels of bureaucracy, and all under slogans of centralization, cross-ownership, and legends of monopolists. Unfortunately, Netanyahu and the responsible minister Nir Barkat did not know how to put her in her place.