Half of Municipalities Demand Arnona Hikes While Prime Minister Remains Idle
121 local authorities have requested exceptional municipal tax increases for 2027, yet Prime Minister Benjamin Netanyahu has failed to sign the necessary guidelines. Meanwhile, Wall Street is reeling from Big Tech earnings reports, Elon Musk has lost his trillionaire status, and in Israel, a violent attack on the News 12 building highlights the ongoing degradation of public discourse.
The tap is open, and you are paying. Our friend A. is a hardworking man. He works hard from morning till night, and after years of saving, he managed to buy himself a four-room apartment in Holon. The neighborhood is so new that there are no convenient access roads to the building, he doesn't dream of public transport, and certainly not of a grocery store. What he does have is an arnona (municipal tax) bill. Every two months, the municipality demands 1,500 shekels from him for a road that hasn't been paved yet and a bus that won't arrive. And soon it will ask for more.
A. is not alone. 121 local authorities, about half of the authorities in Israel, submitted requests to the Ministry of Interior to change the arnona in 2027, and it is possible that the number will rise further. All this is over and above the automatic annual update, which alone will stand at 3.05% in 2027. The appetite is revealed by the height of the requests: Azor is asking for an exceptional increase of 10% for businesses, Ariel wants a 5.15% blanket increase for businesses and residences, Ashdod is asking for 4.45% blanket, and Nazareth submitted a request for a blanket increase of 30%. Rehovot wants to raise the arnona for residences by 8%, Ramat Gan is aiming for 10% for businesses.
Behind the dry numbers hides another sign of lack of restraint: there is no Minister of Interior. The portfolio is held by Prime Minister Benjamin Netanyahu, and he did not bother to sign the guidelines for the increases. Senior officials explain that the multitude of requests testify to one thing: the authorities know there is no problem at all in asking and receiving.
The Manufacturers Association has already done the math. The automatic update mechanism alone has added about 3.5 billion shekels a year to arnona payments since the outbreak of the Iron Swords war. In January 2027, another increase of about 1.3 billion is expected. The president of the Federation of Israeli Chambers of Commerce, Shahar Turgeman, adds that the arnona for businesses in Israel is already about 40% higher than what is customary in Europe, and every additional shekel eventually rolls over to the price paid by the public.
Part of the answer lies in the arnona discounts that Shas took care to grant to its voters. According to a study by the chief economist at the Ministry of Finance, the value of the discounts jumped from 2.2 billion shekels to 3.2 billion. Someone has to fill this hole, and the authorities are simply rolling it over to you. This is purely jumping on the bandwagon of election economics: the tap is open now, and it is easy to take more from the public when the government doesn't care.
The Week of the Magnificent 7
If you opened the trading screens on Wall Street this week, you could feel the anxiety. The earnings season of the giant technology companies (Big Tech) reached its peak, revealing a picture of a split, nervous, and results-thirsty market. Investors are no longer satisfied with shiny promises about the future of artificial intelligence (AI) — they want to see receipts in the bottom line.
The big drama of the week belongs to Apple, which presented an excellent report with revenues of almost 109.5 billion dollars and a 22% jump in iPhone sales, but saw its stock dive by about 5% in after-hours trading. The reason? Its services division disappointed forecasts, and investors are worried about the fact that the company is lagging in the AI race. Amazon, on the other hand, provided a celebration for investors, sending its stock soaring by more than 9% after the close, driven by its cloud computing division (AWS), which recorded its fastest growth rate in 18 quarters (37%). Microsoft also celebrated a strong quarter, showing that the huge demand for AI justifies its massive capital investments.
Meta took the most painful hit: Mark Zuckerberg's company saw its stock plummet by 11% after presenting a surprising 14% drop in net profit and a disappointing revenue forecast. Investors lost patience with Meta's report that its capital investments in AI will almost double this year, reaching 145 billion dollars, while its virtual reality division continues to bleed billions.
Musk: From Trillionaire to Philosopher
Elon Musk, who is used to breaking records, found himself this week in a situation where his fortune shrank below 700 billion dollars, and he lost the title of the first trillionaire in history. SpaceX stock plummeted by almost 50% from the June peak, and Tesla also took a hard hit following reports of disappointing profits. Musk chose to take the event with his familiar cynical humor, updating his X profile to "(Former) Trillionaire."
In an interview with The Economist, he claimed that by 2036, AI and robotics will create such inconceivable abundance that the concepts of salary or pension savings will evaporate. However, while he fantasizes about a world without cash, he launched X Money — a built-in digital wallet on X, including commission-free transfers and a metallic Visa card. When Nobel laureate Prof. Daron Acemoglu challenged him on X, asking why he wouldn't donate his fortune if money won't matter in 2036, Musk replied: "I am indeed going to do something like that!"
Another Brick in the Wall
To understand the abnormality of the Israeli reality, one can check the election compass on this site. Among the questions that distinguish between voters are: "Should Minister Levin recognize the appointment of Judge Isaac Amit as President of the Supreme Court?" and "What is your opinion on a pardon for Netanyahu before the end of his trial?"
The basic foundations of the system are being trampled to serve the personal goals of the Prime Minister and his ministers. This week, this arrived at the entrance of the News 12 building: a brick shattered the door, accompanied by a threat: "In the end, someone will die." The protest was directed against the attempt to criticize those who, in the eyes of the attackers, are above the law. The government is in no hurry to condemn; MK Nissim Vaturi even called the incident a "conspiracy." It is a crossing of a red line, but after four years of such events, it is hard to remember how many lines have been crossed.
