ליברטריאנים בישראל

Economists often bring up the concept of sin taxes – the concept of taxing a product more than other products, to discourage its use and to pay for the negative externalities of the product. In Israel, special taxes exist on cigarettes, alcohol, and automobiles – in the latter case, a 73% sales tax or more is paid for every new car on the market. But, amazingly, there exists another, lesser-known product in our economy on which a sin tax is paid: amplifiers for musical instruments, on which the Jewish State charges a 15% tax over and above the VAT.

What is the purpose of this tax? Is it to discourage people from playing music too loudly? But then, there already exist laws prohibiting noise disturbances, and fines to discourage these disturbances that no doubt cover whatever negative externalities they might have. Is it to discourage domestic music production, then? Surely that cannot be the government’s goal – after all, the same government spends millions of shekels every year to encourage domestic artists of all sorts.

And indeed, it probably isn’t. What is likely to be the case is that the current law is a leftover from the age of 1960’s socialism, when electronics of all sorts were seen as a luxury – and luxuries, of course, had to be taxed. That this put them even further out of the reach of the common man and sabotaged the very process by which luxury items become affordable was a concept 1960-era socialists were probably psychologically incapable of grasping.

Today, we are told that Israel is a capitalist state. Free trade, privatisation, and tax cuts are supposedly the order of the day – and yet, a young man in South Tel-Aviv needs to pay a 15% sin tax to enter the music world. That there are those for whom music is a means of sustenance – those who play at clubs and restaurants – that does not even matter for anybody.

Of course, it would be in vain to blame the Knesset for this. It is likely that the majority of Knesset members are not even aware of this little tax. It is reaffirmed, year after year, on the request of elderly bureaucrats that probably have no idea that electronics have stopped being a luxury. (Nevermind that luxury taxes are counterproductive). They are simply too old to notice that the 1960’s are over.

We are not to expect these people to just wake up and notice that. Nor will they learn on their own that music isn’t a sin. It is up to Israel’s young people to get up from their comfortable chairs and teach their ancestors that lesson. And while we are at it, it would be best if we took a long hard look at the system as it is – with its convoluted web of sin taxes, permits, and obstacles that make it harder and more expensive for the young to make music, to make a living, or simply to have fun.

And by “a long hard look”, I really mean a sledgehammer.

~~By Boris Karpa