Illegal Taxes
Ha’aretz
on January 10 reported that the Interior Ministry has determined that since the
Knesset failed to pass an arnona
law this year, municipalities have no legal right to collect this city tax this
year. Yet cities throughout Israel are sending their residents the bill right
now.
Current
law allows cities to raise the municipal tax known as arnona
only by the rate of inflation each year. Inflation in 2000 was essentially zero,
thus not allowing for any hike. Yet Beiga Shohat’s Finance Ministry and the
Barak government’s Interior Ministry submitted an addition to the standard arnona
law that would allow a special 1.25% tax hike, for no special reason other than
being a government gift to wasteful municipalities. The Knesset refused to pass
this law, and the Interior Ministry, afraid
to leave cities with not tax, instead submitted a bill to ban a rate hike
this year. This, too, was not passed, and thus no arnona
law passed this year. At which point the Interior Ministry,
responsible for municipal authorities, announced they could not collect their
tax at all, in absence of a law authorizing them to do so.
When
we at IASPS, along with hundreds of thousands of other Israelis, received a bill
this week to pay the tax – in our case, from Jerusalem (a city hall, by the
way, in which 48% of receipts from the tax go to pay salaries of city hall
employees while all city services are being cut back as the city totters above
bankruptcy), we raised our eyebrows and phoned the Interior Ministry. The
spokesman reiterated what Ha’aretz
reported. Then we called the ministry’s legal department.
The
legal expert began by informing us she could not speak to “citizens” who
call; just pay your bill, she said. We asked for the legal basis and were told
“members of Knesset wouldn’t act so irresponsibly as to let such a thing
happen, it cannot be, anyway the cities need money, so pay the bill.”
Again,
she impressed on us that she should not, could not and would not talk to mere
“citizens” and that was that.
Pursuing
the matter further with other legal experts, we discovered there are four
interpretations of the current situation: 1. As no law was passed, the cities
cannot collect taxes without a legal basis for doing so; 2. As no law was
passed, the cities can do whatever they want; 3. As no law was passed the cities
can raise the tax only as much as inflation, as per the previous law; 4. As no
law was passed, the cities can raise the tax as much as they want.
So
there it is: limited government vs. unlimited government; the government can do
either what it is specifically authorized to do by law or it can do anything it
wants not specifically proscribed by law. Fortunately, there is no need for our
readers to be in suspense: by their actions, the cities of Israel have shown
they can charge residents taxes even without being authorized by law.
And
as for the rate? Well, we in Jerusalem received a bill for the exact amount we
were billed last year, in other words, no hike…but, the standard reduction
given each and every year for people who pay on time, about 2%, was cut…to 1%.
Presto! A 1% rate hike without authorization.
As
our diffident bureaucrat noted, our beneficent legislators would not stop cities
from collecting the money they want from taxpayers. As for us, we can only hope
she has meanwhile recovered from the moral quandary she faced when forced to
converse with us lowly citizens.
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