Yesterday, Moshe Gafni, Knesset Finance Committee Chairman, made a curious statement in regards to a proposed Israeli Value Added Tax (VAT) hike, over which he just used his authority to delay for one month until September 1, 2012: "War hasn’t broken out, and we don’t need to raise the tax immediately.”
The Israeli Finance Minister, with the backing of Bank of Israel Governor, Stanley Fischer, attempted to ramrod the 1% VAT raise through the Finance Committee to take effect today, August 1, 2012. Apparently, Gafni took issue with the way in which the tax increase was presented to him, though sources do not reveal exactly why.
As to the clout of Gafni and his his ultra-Orthodox party, United Torah of Judaism, its leaders have headed the Knesset Finance Committee since the 1990's, which allows the small party to control the purse strings of the Israeli budget. The party is also central to a deeply divisive issue in Israel regarding adult conscription into military and/or civil service, for which 54,000 ultra-Orthodox Jews currently enjoy legal exemption.
Here's where the dates get interesting.
According to a May 1, 2012 article in the Jerusalem Post, Gafni told the Knesset Foreign Affairs and Defense Committee that, "Haredim (the ultra-Orthodox) will go to jail rather than get drafted into the army." Why? The "Tal Law," the very law protecting ultra-Orthodox Jews from the draft (and from the alternative of prison, for "draft dodgers"), expires August 1, 2012 because it is not eligible for its usual five year renewal. It was struck down as unconstitutional by the High Court of Justice on February 21, 2012.
The issue of conscription in Israel for civil or military service and the exemptions for Haredi and Arabs is "one of the most heated disputes in Israeli society." It has been a major source of political contention for Netanyahu in attempting to manage his coalition. Which is likely why he dissolved the latest Tal committee on July 2, 2012 just prior to the issuance of its final report. Committee Chairman Plesner still published the report two days later, which recommended conscription for the ultra-Orthodox Haredi. At the time, Netanyahu said that he would convene a meeting of the leaders of the ruling coalition party members "in order to draft a proposal that would garner a majority in the Knesset."
Well, the month of July has passed, and we are today on the August 1 expiration of the Tal Law, which exempts 54,000 ultra-Orthodox from conscription. Given Finance Committee Chairman Gafni's protector status of this group, we are again drawn to his nixing words: "War hasn’t broken out, and we don’t need to raise the tax immediately,” along with his concurrent furry at how the tax proposal was presented to him.
Was this an indication of a failed back-door deal to allow a de facto extension of the Tal Law (or similar) in return for a tax raise? More ominously, as tensions continually escalate with Iran and Syria, was it an indication that war is imminent, perhaps a mere month away--its timing resting upon negotiations of a mere tax law?
Admittedly, this deviates from our usual areas of research and expertise. But, our research has revealed no discussion of a connection between these events (at least in the English language). Which is why we leave it to the astute readers of these pages to offer any suggestions and information.