Tax Changes in Israel: How to Balance a Budget

Summary of Article: Lapid, Finance Minister of Israel, is making several changes to the tax code. He is considering making tourists pay a value tax (VAT), something which they have until now been exempt. In most Western countries, tourists pay this tax. He is also raising taxes on income, corporations, cigarettes and alcohol. These are all measures to cut the budget.

Discussion with Kids:

• What are things that you pay for as a family with the money you make? (Food, rent/mortgage, clothes, toys, etc.) What are things the government pays for? (Public schools, streets, hospitals, universities, policepeople and firepeople, etc.) 
• How does the government pay for this? By raising taxes. Taxes are when you pay a small amount of money for something you buy (sales tax), for owning your house (property tax), etc. If you look at a receipt, you can see what the sales tax was. 
• What happens if a government spends too much money? How to they get more money? They need to find a way to raise more taxes or to spend less. If you were in the government, how would you save money or balance the budget? 
• In Israel, the Finance Minister is trying to find a way to spend less by raising taxes on certain things -- taxes on income, companies, tourists, cigarettes, and alcohol. He is also firing some civil servants (this saves money from their salaries). 
• What do you think of each of these ways of saving money? Give arguments for and against each one.