הפרוגרסיביות של הנחות ארנונה למגורים והבניה חברתית

This paper reveals a noticeable difference between a high degree of progressivity of income-related local property tax relief versus the proportional or regressive incidence of recognition tax relief. Recognition tax relief is tax relief given to family members of war-related casualties and holocaust survivors that recognizes either their contributions to society or their identity-related suffering. Following Schneider and Ingram, I suggest that certain social groups benefiting from positive image and political influence are more likely to receive favorable tax treatment regardless of their economic status. The contribution of this study is to show that tax progressivity is affected significantly by social construction in addition to the standard economic considerations such as efficiency, inequality aversion and earning inequality. The unintended consequence of such tax design is a higher degree of progressivity in Arab municipalities compared to Jewish and Druze municipalities due to greater prevalence of "recognition tax reliefs" granted to Jewish and Druze residents.