Wednesday, August 24, 2011

The Case For Cutting Off Federal Aid To Israel

By Carl
Made by an Israeli, albeit unwittingly, since Joel Braunold discusses private charitable contributions from foreign Jews to Israel.
Braunold has a point, of course. In a day and age of austerity, America can ill-afford to let Israel drink as deeply from the foreign and military aid trough as it used to, if at all. This is a very good time to reassess our commitment to a nation who's people, with some reluctant ignorance by the government, continual intrude on areas we've consistently deemed to be non-Israeli.
Israel saw an increase in millionaires of 20% between 2009 and 2010. Re-read that. If there were 100, there are now 120. But there are 10,000, 16 of whom count as billionaires with a collective net worth of $45 billion dollars.
Individual tax rates in Israel top out at 44%, I should point out (at an income level equivalent to $96,000), but corporate tax rates are only 25% or so (compared to a nominal 35% in America, even tho no one pays either rate). Israel also has a VAT of 16% imposed at every level of the goods finishing process.
And yet, the rich are still getting richer. And unemployment stands at 7% or so, significantly lower than the US. Higher taxes, more jobs. Funny how that works!
In 2007, the US ended economic aid to Israel, based in large part on the precursors to these developments: an economic boom that seems unaffected by world events.
President Obama has increased Israeli military assistance in his 2011 budget proposal to $3 billion, with an additional $3 billion in loan guarantees. But he's frozen arms sales until progress is made in the peace process, which explains Israel's sudden interest in making nice with the Palestinians. Events between Egypt and Israel will likely unfreeze some of that aid, which brings the question "Did Israel provoke the conflict?" into sharp contrast.
And of course, there's always something brewing in the Gaza.
Now, I understand the strategic advantage having a foothold, particularly a coastal foothold, in the Middle East and would not propose cutting off all aid to Israel.
But really...people here are suffering. Let the billionaires take care of some of this stuff.
(crossposted to Simply Left Behind)

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