IN-DEPTH FEATURES
What Chareidim Give & Take From the Israeli Economy

State budget time is invariably a time of anti-chareidi incitement. Every shekel transferred to chareidim is examined from all possible angles. The height to which this incitement reaches is illustrated in a completely preposterous article that appeared in the Israel daily newspaper Ha'aretz a year and a half ago, purporting to show how a chareidi family receives NIS 17,000 each month from public coffers!

This writer made his own calculations. When the facts are examined correctly, however, this totally false claim is debunked. The truth is that the chareidi sector brings in far more to the state treasury than any other sector -- much more than newspaper reporters and judges.

A year and a half ago, a series of long, venomous articles appeared in the morning daily Israeli newspaper Ha'aretz under the heading, "Chareidim '98 -- the Price." In the background of every article was a caricature of a chareidi. (The author of this Yated article sent a brief reaction to the editorial board of Ha'aretz, but of course it was not published. The chareidi community doesn't even have a right to react in the newspapers of the champions of human rights and freedom of speech.)

I won't weary my readers with the full details of the preposterous claims contained in the article and its associated articles. In general, hate-filled articles against the chareidi community have long become routine. The "data" and conclusions of this series served as propaganda material in Shinui and Meretz' incitement campaigns in the last elections. Our sector has recently been in the forefront of propaganda attempts in which the continuous chorus of religion-haters has been sharpening its teeth in order to overturn the chareidi community. For these reasons, I regard it as my duty to inform the readers of the real statistics and to expose the lies.

The main assertion of those die-hard, professional critics is that the chareidi sector lives at the expense of the Israeli taxpayer. For that reason, those chareidi-haters spread false stories under the guise of "facts."

How Does an Avreich Earn NIS 17,000 a Month?

The main article in the series was called, "The Avreich's Basket contains NIS 17,000." Under this sensational heading was a picture of a young avreich with a shopping cart. The headline creates the impression that every avreich has a net income of NIS 17,000 from State funds. The subtitle reinforces this when it asks, "So why should they work?"

Ha'aretz apparently was relying upon the short memory of its readers, hoping that they had forgotten that a number of months previously the paper had published an article on poverty in the chareidi sector. The title of that article, "Investigation," was in bold type.

So that readers wouldn't harbor illusions about fortunes waiting for them somewhere out yonder, I'll explain their "ingenious" calculations in brief.

According to what they write, a family of 12, all of whose children are under the age of 18, receives NIS 4,500 from the National Insurance Institute (Bituach Leumi) in the form of children's allotments. For two of its children under 18 who live in dormitories the family receives NIS 3,100 a month from the Treasury, in addition to an income increment of NIS 1000 if the wife does not work and NIS 650 which the husband receives from his kollel from the Religious Affairs Ministry. They also receive NIS 1000 more in the form of reductions for kindergarten tuition and in health and property tax: all of these add up to NIS 10,000.

If we then translate this sum into a gross amount; in other words, if we add the National Insurance and the income taxes which would be paid to the government by someone with an income of NIS 10,000, we get another NIS 7000. Presto! We have a sensational headline to plaster on a full page of Ha'aretz and to use later on as a reliable "fact" to goad the public into believing that the "basket" of an avreich "really" contains NIS 17,000.

Let us not delude ourselves. Our answers will not convince even one of those shoddy mudslingers. The truth is, that it is really unwise to answer them. Such types -- disciples and successors of religion-haters from all generations -- are uninterested in answers. Their sole purpose is to stifle and to defame the chareidi sector.

In the questions of the arba bonim, the phrase "ki yish'olecho bincho" -- "when your son asks" -- is used in reference to the chochom and the tam. Regarding the rosho,, the Haggodo says, "ki yomru beneichim" -- "your sons shall say," meaning that the reshoim say but do not ask. Their intention is to criticize, not to hear answers. As a result, there is no point in answering them: anyway, they won't accept the truth. What we must do is "dull their teeth."

The Lie Behind the Statistics

However, in order to know how to respond to people who are exposed to incitement, so that we ourselves won't think that there is substance to their remarks, we must dwell on some of the lies.

a) Transforming the sum from net to gross in this case constitutes not only ignorance of arithmetic, but also foolishness. It is difficult to believe that a self- respecting newspaper could permit itself to publicize such silliness. It is a financial maneuver whose only purpose is to inflate the numbers to make them sound worse. The exercise was to find out about the income of chareidi families, and to include taxes that they might have paid is sheer legerdemain. They do not benefit in any way from those taxes that they did not pay. By eliminating this we have already solved nearly half of the riddle and have lowered the avreich "basket" of NIS 17,000 to 10,000.

b) None of the amounts (except for the kollel allotment of NIS 650) are unique to the chareidi sector. They apply to every large family. There is no law stating that it is a criminal offense to raise children (at least not as this article goes to print). Every citizen of the state whose family meets the criteria of size is eligible for such benefits. Actually, my dear friends in the Left, those who benefit most from these allotments are the Arabs. To our good fortune, the Arabs also receive Children's Allotments -- otherwise the government would have canceled them a long time ago. Thanks to them, the differential payments between army veterans and others was at least partially reduced.

c) Those who benefit from funds given to dormitories are mainly secular agricultural schools, such as Kfar Hayarok with 252 students in the dormitory; Hadassah Neurim with 491 students in the dorm; Mevo'ot Yam: 592; Nir Ha'emek:740; Keztinei Yam Acco: 407; Ben Shemen: 450, and others, as well as the yeshivot tichoniyot and the ulpanot of the Mafdal. Most chareidi boys don't attend yeshivos with dormitories, and girls very rarely attend seminaries with dorms.

d) The "calculation" was based on the needs and income of a family of 12, and relates to a situation in which both husband and wife do not work and all of the children are under 18. A third of the sum is based on 2 children under 18 in a dormitory. In other words, it relates to a very small amount of families. In truth, few families have eight children under 18, and no families have them for very long. Even fewer have two in dormitories.

If we want to inflate the sums, it would be preferable to bring an example from a family of 20 members, in which, lo oleinu, one of the children was hurt in a traffic accident and is eligible to numerous benefits. In such cases, one could reach a sum of NIS 30,000.

Chilonim '99 -- the Price

Now let's figure out how much a secular citizen with four children costs the government if two of his children study in university and two in a vocational high school.

The two university students cost the state NIS 7000 per month. The two high school children: NIS 2,500. The family receives a National Insurance Institute allotment of NIS 500 for the children. If they are in a dorm, it costs the state another NIS 3,100: together this adds up to NIS 13,100. This, if translated into gross cost according to the method devised by Ha'aretz, can be supporting material for a headline shouting, "The Basket for the Secular: NIS 20,000." (The statistics relate to the fiscal year 1998.)

The truth is that if we translate all of the benefits the state gives its citizens into currency, such as a long school day, extracurricular activities and clubs at the community center, enrichment programs in school, participation in youth movements, the national media, sports, museums, theaters, National Insurance Institute allotments for children, handicapped, the elderly and other benefits, we will really arrive at a sum of NIS 20,000, or perhaps even more.

The cost of a student in the secular educational system is much higher than that of a student in the Chinuch Atzmai; and even higher than that of a talmud Torah (cheder) student, since the government's participation in the costs of those systems is far lower than its participation in those of the secular schools, as we shall later explain.

It should be noted here that in 1998, every secular student in the Israeli educational system cost the Israeli taxpayer NIS 3500 per month, while the budget for a ben yeshiva was only NIS 550 per month, and for an avreich: NIS 650. For every secular student, it was possible to support six yeshiva students. The word "lie" is too delicate to define the base slogan, "money for universities and not for yeshivos."

Let's examine the issue from an additional angle: The State budget in `98 was NIS 207 billion. If we divide the budget per capita, each citizen should receive NIS 3200 a month. If we deduct expenses for defense and payment of the State's debts as well as other nation-wide expenses, the amount that each citizen should receive per month is NIS 1600, meaning that the share of a family with 12 members should be NIS 19,200.

However, in reality this calculation is not fully valid, although it can give us a certain ballpark indication of a reasonable amount. In other words, the sum of NIS 10,000 for a family of 12 is quite reasonable.

Do the Chareidim Pay Taxes?

An additional claim made incessantly by the Leftist propagandists is that the chareidi sector doesn't pay taxes since the majority of the men study in kollel. The answer to this claim is best explained in a detailed article which was published in Ha'aretz, whose main points I will present.

The State's income from taxes is derived from direct and indirect taxes.

Direct tax (income tax, business, employers tax, etc.) constitutes 51% of the overall taxes, while indirect taxes (value added tax (VAT), purchase tax, fuel tax, etc.) constitutes 49%. This information was taken from the report of the Director of State Incomes from `95.

The chareidi taxpayer shares the burden of indirect taxes equally with the secular. These are generally regressive taxes on consumption, and apply to all consumers. Chareidim consume, like everyone else.

To the abovementioned, we must add the State income from Uncle Sam's annual aid at the expense of the American taxpayer, as well as annuities from Germany and additional grants from abroad. Add in incomes from land and other State assets, which all citizens pay equally -- which account for more than 10% of the national budget -- and the question is trimmed even more.

Regarding direct taxes, i.e., income tax, there is a surprise here, too. 75% of the income tax is paid by the upper tenth of the economy (those with a high income of more than NIS 27,000 a month). In other words, 75% of the income the State receives from its income tax comes from a limited, wealthy group constituting only 10% of the taxpayers.

15% of the tax burden is paid by the ninth decile (those with incomes of over NIS 17,000 but less than NIS 27,000), while only 10% by the sixth, seventh and eighth deciles together.

50% of all the taxpayers -- secular as well as chareidi -- are under the income tax threshold altogether. This data does not include children, the elderly or the unemployed.

And so, the relation between rich and poor also prevails in the chareidi sector. There is no doubt that at least 10% of the wealthy chareidim are included in the top decile, and there are also many in the ninth decile.

Avreichim, who constitute a large part of the chareidi sector, are simply a part of the 50% overall whose wages are below the tax threshold. In addition, if we add to that another 10% unemployed, the chareidi community is not different from the national average.

Furthermore, the upper decile also includes investors from abroad who have taxable income in Israel, a large percentage of whom are chareidim. Nearly all local chareidi entrepreneurs who belong to the top decile invest in Israel to a very large extent. Precisely in the top decile which, as we have said, provides 75% of the taxes, the share of the chareidi sector, we suspect, is especially large.

The Hidden Cost of Taxes

Although it is correct arithmetically that those in higher income deciles pay 60% of the taxes while 50% of the taxpayers supposedly pay no income tax, this is not absolutely correct in practice. Don't worry about a company owner being forced to pay thousands of shekels to income tax. The rich man will never lose: he will raise the prices of his product so that the tax burden eventually falls on the consumer. The high cost of living in Israel is what has led to a situation in which the citizen pays direct taxes in an indirect manner.

For example, if a shirt costs a consumer NIS 100 in a store, NIS 17 out of that is the value added sales tax (VAT). The storekeeper buys the shirt at 60% of the remaining cost. The markup is for profit and to cover costs, including income tax and the National Insurance Institute payments for his workers, as well as land property tax. The dealer takes the 10% intended for profit to cover his expenses. The wholesaler sells the shirt for NIS 45, which includes expenditures on tax (including those of the owner of the firm which pays 50% in taxes), income tax, National Insurance, health tax and raw materials. The bottom line is that if we claim that more than 50% of the cost of the shirt goes for taxes, we won't be far off.

If we continue calculating and realize that, while with regard to income tax the rich pay much more because the tax is progressively graduated, the situation is different with regard to National Insurance Institute (Bituach Leumi) payments. These payments are uniform and they are paid starting from the first shekel. National Insurance Institute payments also have an upper ceiling, while income tax has only a bottom rate. They are paid by teachers, ramim, melamdim: essentially every citizen. Even those who don't work must pay the National Insurance Institute. The income of the State from the National Insurance Institute collections in 1998 was NIS 30 billion, constituting a third of the overall direct tax.

In order to complete the picture we night add that the chareidi buyer buys mainly products manufactured in Israel, while his secular counterpart often buys costly products from abroad. It is no wonder that the large companies in Israel pursue the hechsherim mehudarim and respect the demands of the chareidi sector, which constitutes an especially large proportion of the Israeli market: much larger than its ratio to the population. Therefore, even though the basic salary of the chareidi worker is low, his contribution to the overcall local economy is large.

In addition, the average Israeli spends a big chunk of his salary on an annual trip abroad. It is enough to note that in 1998, three million Israelis traveled abroad. The chareidi, on the other hand, spends his vacations in Israel. In addition, thousands of chareidi tourists arrive in Israel every year for long periods.

The Positive Contribution of Hechsherim

I beg the forgiveness of my readers and the editorial board of the paper for mentioning that religion-hating politician who, in the Shinui election campaign, talked about how the secular consumer is forced to pay more because of the chareidi hechsherim citing in particular dog food with a hechsher (for Pesach to certify that it has no chometz) and toilet paper (with a certification that it is not made from sheimos).

But this is the place to say that from a purely commercial aspect, the hechsherim bring about a reduction in prices. Companies are not gemachim,and if they feel that it is worth their while to invest in a chareidi hechsher it is not for altruistic reasons, but because they want to increase their sales in Israel and abroad which, of course, results in the lowering of the cost of the product due to economies of scale.

Surprisingly, even poor avreichim contribute to economic growth, because this sector purchases so many items secondhand, especially cars, thus enabling the wealthy to exchange their cars at a faster rate. As far as electrical appliances are concerned, the trade-in campaigns function on the assumption that a person is unlikely to discard a good product and buy a new one -- even a car. Without the used car market, the new car market would suffer from a serious recession.

If the issue is examined from a purely economic standpoint of the "cost of the chareidi sector to the economy and social infrastructure in Israel," as Ha'aretz states, the chareidi community is the least costly and most effective one. The chareidi sector is concentrated in a few cities in relatively crowded conditions with large families, kein yirbu. This results in tremendous savings of resources and lower infrastructure costs.

The Torah world, from a purely economic standpoint, constitutes an asset to the state's coffers and, ironically, an avreich poring over his Torah studies directly helps the Israeli economy in other ways, as we shall further explain.

Some yeshiva students benefit from contributions from abroad, which inject considerable foreign currency into the Israeli economy. Many Torah institutions also bring in funds from abroad, especially for capital improvements. In addition, the thousands of students from abroad who come to study in yeshivos in Israel support Israeli tourism and live on foreign currency sent to them from home.

The main chareidi commercial branches, such as diamonds, religious artifacts, esrogim, are primarily for Jews from abroad, i.e., for export, and they also bring foreign currency into the country.

The chareidi sector then brings in foreign currency to the State's coffers and uses Israeli currency. In short, chareidim are exemplary economic citizens.

Those Who Study Torah Eventually Work

The claim that yeshivos are not productive stems from total ignorance. Students who fill the halls of the botei medrash later officiate in rabbinical positions or as shochtim, mohalim, sofrim, teachers, lecturers, and many other positions. For comparison's sake, let us add that the percentage of students in the Humanities Departments of the country's universities in the year 5754 was 33%; in the Social Science Departments, 26.9%. In other words, 60% of these students study unproductive subjects.

Let us add that important observation that one sector in the country which on the surface seems to belong to the upper decile and to bear the tax burden, actually imposes a heavy burden on the Israeli taxpayer. We are referring to government workers with high salaries who, on the one hand pay 50% income tax, while on the other hand all of their money, including the taxes paid, comes from the state treasury. Heading this group are the judges, whose basic salary, without the many bonuses, reaches NIS 30,000-40,000 a month (including Justice Elyagon who very publicly called the entire chareidi sector "parasites").

In this sector, the chareidi community is persona non grata. These jobs are reserved for a certain type of people: from the left side of the map and on. This is the case in the directorates of government companies as well as in key job positions in other areas, in which the common denominator is maximum income and minimum work. Were a chareidi apply to such a job, the Ben Dror Committee would immediately disqualify him. Afterwards, with feigned innocence, they complain about the self-imposed poverty of the chareidi sector.

Summary

In conclusion, for those who are confused by the numbers, let us repeat: as far as indirect taxes are concerned which bring in 49% of all State income, all citizens of the country share an equal burden, chareidi and non-chareidi. As far as direct taxes like the income tax, we maintain that the share of the chareidim as a sector of Israeli society is even larger than their proportion of the population, relatively speaking. We also argued that every consumer, including yeshiva students, really pays even many direct taxes in an indirect manner.

The Reporter Against Chareidim

The articles in Ha'aretz were written by its reporter who specializes in chareidi issues, Shachar Ilan, who is known for his animosity towards the chareidi sector. This is another example of what we have said: a lack of knowledge of the facts is not behind the incitement, because someone like him does know the true facts. Hatred for everything sacred is the true motive.

Whoever read the series of articles and saw the overall headline which is composed in classic antisemitic style ("Chareidim `98, the Price") cannot help but discern the hatred that emanates from it. Whoever composes such a headline, and says that the monthly support of a supposedly typical avreich is NIS 17,000, is not worthy of being called a journalist, not even in Ha'aretz.

But more serious is the very premise that underlies the whole series: that the cost of specifically a chareidi citizen to the Israeli economy is an interesting and important public issue. It presumes that we are some special class and that every penny given to us may be questioned. The transparent message behind this article is that the chareidi sector has no rights, and that every shekel a chareidi resident receives is really illegitimate extortion.

In general, a newspaper's economic reporter presents economic information and its reporter for Jerusalem affairs reports on events in Jerusalem.

However, instead of reporting to his readers about the chareidi sector -- such as its monumental chessed enterprises that are unparalleled in the entire world, its peerless education, its large contented families, its honesty, its care to return lost items, its meticulous observance of the laws of loshon hora -- the reporter for chareidi affairs of Ha'aretz spends his time mudslinging. It would be proper to change that reporter's title to "Reporter for Incitement and Defamation of Chareidim."

Without Bituach Leumi, 34% of the Country Would be Below the Poverty Line

Without the Bituach Leumi grants, 34% of the Israel's population would be under the poverty line. "The grants for the handicapped, for the elderly and for children which the Bituach Leumi provides, lower the amount of those under the poverty line to only 16 percent," said the Director General of the Bituach Leumi, Yochanan Shtesman, at a lecture at the Commercial and Industrial Club in Tel Aviv.

Shtesman adds that today 80% of Israel's populace lives very difficult lives, financially. "Most of the people suffer heavy financial stress," he says.

Of the 112 thousand people who collect unemployment payments today, only 11 thousand receive them for more than one period. Therefore, in Shtesman's opinion, it isn't right to say that in Israel there is chronic unemployment. Only 1500 people in the State of Israel receive unemployment annuities for more than two periods.

Bituach Leumi collects about 8% of the gross national product a year in its taxes.

There's a Law, but There's No Equality

by E. Rauchberger

In 1992, the Budget Law that was passed declared that the Chinuch Atzmai system must receive equal treatment in the budget, and that they will receive what they deserve without any discrimination whatsoever, according to the generally accepted criteria of the entire educational system.

At a meeting of the Knesset Education Committee which took place last week a number of very sad facts became clear which prove -- for the umpteenth time -- that as far as chareidi chinuch and chareidi children are concerned, no law or amendment has any effect. The authorities will continue to discriminate against them freely.

Rabbi Moshe Gafni related that on Sunday (14 Adar I) he visited the southern town of Yerucham and met with the chairman of the city council there, Motti Avisror. At the meeting, Avisror showed him the summary of a discussion he had with the Education Ministry about his requests for funds to renovate and fix various educational institutions in the town.

Rabbi Gafni was shocked to learn that the Education Ministry simply ignored the needs of the chareidi educational institutions, and that it summarily absolved itself from its responsibility for the buildings of these institutions.

So that there would be no mistake, and in order not to allow the slightest chance that the head of the city council of Yerucham would make a mistake or not understand clearly and correctly the policy of Education Minister Yossi Sarid and his office, the Minister very succinctly and unambiguously summed up, in writing, the discussions with him. No one should think that these instructions were given to the head of the council in a conspiratorial whisper, or in a subtle recommendation accompanied by a meaningful wink. Everything was laid on the table for all to see. The Law of Equality may be a law, but the summary of the deliberation proves that it has not brought equality.

This is what the summary says: "The request to renovate buildings and kindergartens will be examined . . . Renovations for mamlachti dati were approved. The needs of the united mamlachti schools have also been approved. The Toras Moshe school belongs to the Chinuch Atzmai network and therefore the Ministry will not fund the renovations. Messilah Bo'arava belongs to the Chinuch Atzmai, and is not the responsibility of the Minister in all that relates to its buildings."

Rabbi Gafni was irate over this document which determines that the obligation for equality in respect to the institutions of the Chinuch Atzmai does not exist and called it: "A criminal document."

At the same meeting of the Education Committee it also became clear that not only are the chareidi educational institutions of Yerucham deprived and discriminated against, but so are the chareidi special education institutions. These institutions, nationwide, require 10,000 classroom hours a week under the Shiluv (Integration) program, however in reality, as stated n the letter of the Education Minister to Reuven Rivlin (Likud), they receive funds for only 3000 classroom hours of study due to "a lack of money," which means that 7000 hours aren't funded, even though every reasonable person understands the great importance and need for such institutions.

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