-- October 29, 2011- Rockets in the South, Demonstrations in Tel Aviv

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Israel Update
A Daily Analysis
By Marc Schulman

October 30, 2011- Rocket Fire Continues in the South, Chages in Tax Policy Approved

The rocket firing on the South has continued into the evening of hours of Sunday. For a period during the day there was talk of a ceasefire, but that ended up being illusionary. This is asymmetric warfare at its extreme. On one hand, Israel has been firing only on those directly and indirectly involved in the shooting of the rockets, while the Islamic Jihad with, what must be, the quiet support of the Hamas, has been firing at any Israeli city within range.

The results have been asymmetric as well, with the Israeli Air Force killing at least 10 of those involved in the shooting, while one Israeli civilian was killed. The European Union's High Representative of the Union for Foreign Affairs, Catherine Ashton, condemned the recent flare-up along Israel's border with the Gaza Strip, criticizing the targeting of civilians "wherever they are." Of course it would be too much to ask her to simply condemn the attacks on civilians by Jihad, since they are the only one doing it.

In the meantime, the government approved modest changes in the tax laws, in response to the demonstrations of the last few months. They have placed a 2% tax surcharge on all of those earning more then 80,000 shekels a month. The government have also cancelled a planned 2% decrease in corporate taxes. This money is being used to cancel a planed tax increase on gas, as well as to give tax credits to those with children between the ages of and 5 years old. There is going to be a cut back on import levies, but only on those items without Israeli competition. Thus, these cutbacks are unlikely to have a major impact on prices.

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