{Article authored by economist Gilad Alper and translated into English by Avi Woolf. Originally posted to the Mida website}
The word “dictator” brings up images of vicious and ruthless tyrants. But, originally, the Dictator was a perfectly legitimate job description in the Roman Republic. The Senate appointed the dictator and gave him authority beyond the usual legal limits. This would take place in time of crisis, especially a hard war, when the standard democratic decision-making process was considered too slow and cumbersome.
Many believe that Israel is suffering from a severe socio-economic crisis which the political system is having trouble solving. If we were living in a Roman-style regime, this might be the time for the Senate to appoint a dictator to solve the problem. Setting aside the obvious question of how we assure the dictator steps down at the appointed time, what could such a person do to solve the crisis?
Taxes, Customs, and the Standards Institution of Israel
I can tell you what I would do if I were dictator:
First, I’d abolish the Corporate Tax for the hundreds of thousands of businesses in the country, from grocery stores to Intel plants. The corporate tax is one of the stupidest taxes around: it prevents investment, the opening of new businesses, and the expansion of existing ones, thereby harming employment. Abolishing the corporate tax would attract businesses from all over the world to Israel, increase productivity and competition for human capital, and raise salaries for everyone.
Abolishing the corporate tax would also provide a response to the legitimate complaints about the low rates paid by big companies as opposed to high rates paid by small businesses. Those worried about the reduction in tax revenues should rest assured: Corporate tax revenue amounts to only about 10% of state revenue; the economic windfall that would come in its wake would more than make up for the loss, for both citizens and the state.
Next, I would abolish Import Customs. No more futzing around with increasing customs here and lowering it there or setting all kinds of quotas. Get rid of it entirely. In addition, I would abolish the Standards Institution of Israel which has become a clever device to protect local industry from foreign competition, costing the consumers more and inhibiting their access to quality and low-cost goods from abroad. European or American standards are more than sufficient to ensure the safety and quality of these goods. If it’s good enough for them, it’s good enough for us. Abolishing customs will not only lead to a drop in the cost of living but also a rise in the variety and quality of products of all kinds. Businesses that exist solely thanks to import duties are ripping us off; those that aren’t can and will adapt to a world without protectionism.
But customs aren’t the only policies driving up the cost of living. The high cost of housing is largely due to state control of 93% of land and the planning committees, a cumbersome bureaucratic mechanism which only benefits the clerks who work there. The dictatorial solution? Selling all the land to all who are interested and disbanding the planning committees. Let the citizens build houses and businesses. Release us from the stranglehold of bureaucrats.
Equal Education: Not What You Think
Let’s finish with the most challenging but perhaps the most important issue: education. The educational system is a clumsy behemoth because it is a state monopoly. The only solutions the present system can provide waste buckets of money on pathetic and ineffective “reforms.” The real solution is increasing competition and breaking the government stranglehold. We can achieve this through the voucher system – an equal distribution of tax money to parents that is to be used to send their children to a private school of their choosing.