Who's a Jew?

On lessons we can learn from the Zeiler affair, thanks to our intrepid reps
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The story is perfectly straightforward.

Mayer Zeiler, among the affluent of Kiryat Malachi, has many businesses and assets outside Israel that apparently generate a pretty penny. Reading the paper, he learned that the Rabinovitch tax reform committee was about to repeat a key recommendation of its predecessor, the Ben-Bassat committee, and impose "personal tax" instead of "territorial tax" meaning, an Israeli's income would be taxed wherever he made it, not only in Israel. Zeiler, he understood, would have to pay tax in Israel.

So what did Zeiler do? Did he consult a tax adviser? Did he advise the banks of a change in his business plans? Did he leave his fate in the hands of the Lord's mercy?

No. He may belong to the Chabad sect of ultra-Orthodox Jews, but he was a shade more practical than that. He contacted the members of the Rabinovitch panel, and of the Knesset's Finance Committee, and asked them, if they wouldn't mind, to tweak the rules just a tad, just craft a cute little changeroo that would save him the bothersome task of having to pay tax in Israel.

Happily, completely refuting charges that Israel's parliamentarians and civil servants are a hard-hearted bunch of cynical bums, Zeiler's plea fell on attentive ears. And lo, as though with the wave of a magic wand, attracting hardly any attention, a wee paragraph was inserted to Israel's tax law, stating:

"A person who became a resident of Israel and is the controller and manager of an approved enterprise, will be exempt from tax in the tax years 2003-2006 on income from interest, dividends and rental income that are not income from business and that derive from assets outside Israel that he owned before becoming a resident of Israel, or other assets in their stead that he retained after becoming a resident of Israel. He will also be exempt from tax on capital gains from selling such assets."

Now, how many people in Israel meet those criteria? As of now, just one, it would appear: Mayer Zeiler. A member of the Rabinovitch panel told us last week that to the best of his knowledge, the article was tailored to Zeiler's measurements, in every way but name.

The whole thing is hilarious, of course. Nor is it likely to leave the headlines that fast, as speculation rages as to who dunnit who who was responsible for inserting shall we call it "the Zeiler amendment". The Rabinovitch panel members pointed at the members of Knesset who accused the income tax commissioner, who blamed the members of Knesset, and so on.

In any case, the behavior of the Knesset's Finance Committee, the Income Tax Authority, the Finance Ministry and the Rabinovitch panel regarding the Zeiler amendment is most edifying. We must wonder:

• We wonder in the case of the Zeiler amendment, the lot of them were caught red-handed. But might not there be other clauses in the tax law artistically tailored to a far bigger group of fat cats, whose tax consultants were sitting on the Rabinovitch panel?

After all, several members of the panel serve as tax consultants to some of Israel's richest persons. The Finance Committee heard opinions from every pressure group in the country. The only one not represented at the Committee was the public.

• We learned: Zeiler managed, by dint of a few phone calls and meetings with panel members whether of the Finance Committee or Rabinovitch committee, it doesn't matter to get a law unto himself, exempting him from income tax. We wonder, what are men infinitely more powerful than him doing every minute of the day, every day of the week and every week of the year?

• We learned of the extent of their cynicism. Many members of the Finance Committee and Rabinovitch panel knew perfectly well about this Zeiler amendment, but none, not one arose and cried out against this tailor-made law for one man. That's the new Israeli method of "in your face" everyone understands that anything goes, as long as you've tied up the loose ends and handled the PR properly.

• We learned of the elasticity of the Finance Ministry's spine. The only thing the treasury and income tax officials could mutter in their defense, when asked where the hell that Mayer Zeiler clause had come from was "The Knesset members put it in", not them, oh no. And if so? Why didn't the treasury-tax officials rear up and bite down? Why didn't they fight? Why didn't they denounce the MKs to the press? Why didn't they sic their minister on his abandoned colleagues?

• We learned that behind many a major tycoon, lauded in the business press and wooed by politicians, lurks a wee changeroo to the law, or a itty-bitty re-regulation or a teeny-weeny tender delicately tatted by their friends the taxman, the Knesset member or the government official.

• We learned that Mayer Zeiler is the bread and butter of the Knesset's Finance Committee and of the Israeli economy. We learned that with all due respect to "reforms", infrastructure and all those other chestnuts, our economy has another not-wee, not-itty problem: too many politicians and public officials catering to the needs of people who at best we can name Mayer Zeiler, but who, at worst, we can only identify as being powerful, rich, and well connected.

Who is a Jew?

Is it a person who's mother was Jewish? Not in Israeli street argot: it has come to be a generic term for "aged".

"A Jew visited me this morning, turned out to be one of Israel's veteran industrialists" makes it clear to your conversation mate that the subject of whom you speak is approaching a better world.

But yesterday, we were treated to a new definition of "Jew". When asked why he'd pushed the Zeiler amendment, MK Michael Kleiner responded, "The amendment is justified. It's a matter of principle. If the amendment hadn't been, the Jew would have closed down his business in Israel."

And now, dear readers, we have learned yet another thing from the Mayer Zeiler affair: when he pays tax, dear reader, refer to him as "Israeli", but when a tax evasion scheme is set up for him by our lawmakers, call him a "Jew".