Israel's not on the liststarting and running a business. The top two and four of the top five are from the Far East - Singapore and New Zealand are 1 and 2, while South Korea and Hong Kong are 4 and 5. Denmark is 3, the UK is 6 and the US is 7. Israel? Nowhere to be found. Why isn't Start-Up Nation on the list? Very simple:
We have one of the latest Tax Freedom Days in the world (and 2013 was a good year - I've seen it into August in this country. And no, it's not just the Defense budget).
We have a business bureaucracy that's a mine field designed to pay coupons to certain entrenched elites. For example, sitting in Israel, it is significantly faster and cheaper to set up a corporation in Delaware or Nevada than it is in Israel - I do it often.
Value added tax of 17% (recently cut from 18%) makes goods and services much more expensive.
High real estate costs as a result of government ownership of nearly all the land in the country make housing costs sky high, especially in our major cities. Zoning rules that attempt to make all residences 'equal' mean that you cannot do what you wish with your private property.
A concentration of wealth in the hands of a few families means a stock market that is far from free trading and food costs that are totally out of line with the Western world.
A government that doesn't pay its bills in a timely manner leads to a culture where bills aren't paid in a timely manner. The same goes for making 'mistakes' and not owning them.
A tax system that has incentives for cheating and for a 'black' economy because the tax rates are so high means that those who are honest pay more.
I could go on and on - I live with this business environment daily... when I'm not working in the US.
Labels: Israeli economy