Tuesday, April 13, 2010

Tax Season in America: An Israeli Bonanza

I followed a link to an article in the Jewish Press called, "Society's Proud Parasites" about, you guessed it, Chareidim, and the common practice of living on food stamps, in section 8 housing - taking advantage of pretty much every government program available to continue studying in kollel. Where, the author wonders, is the sense of shame described in classical Jewish literature about living on the dole? Not only is it gone, but it's been replaced with a sense of pride.
I could pile on, but I don't really think it's appropriate - especially not for me. After all, am I really all that different?
No, I work. Thank God, I have a job that pays the bills. I pay my taxes, and even try and give a fair amount of money to charity. But I'm also on the dole from the U.S. government. After all, I'm an American oleh.
Because of the disparity between the systems of pay in Israel and in America, someone living and working in Israel can easily be considered "poor" by American standards. Moreover, he can deduct the foreign taxes that he's paid to Israel to make himself even poorer. And through the largesse of United States economic policy, the government created a program called the EITC - Earned Income Tax Credit where, if you meet certain income requirements, the government will not only reduce your taxes to zero; no, if you're eligible, it will mail you a check. And not a small one. All of this is totally legal. (If you're an American reading this and you actually owe taxes, you can justifiably start getting really mad right about now.)
What's emerged is a small industry of American tax preparers who will help you file your taxes in the States in order to receive what amounts to a relatively large gift from the American government - often thousands of dollars. ($4,000 is not uncommon). Moreover, Israelis are getting in on the deal as well - at least those with American parents. They borrow money to take a trip to America with their children, where they register them for citizenship (for which they are legally eligible). From there they proceed to the Social Security Administration so that they can register their children for U.S. tax purposes. It takes about two years to pay off the cost of the original trip (flights can be expensive), and the rest is gravy. All totally above board - completely legal.
In America, most citizens dread tax season. It's not only the forms and the drudgery. It's the reminder of how much money Uncle Sam took for Obamacare. But here in Israel, April 15th is an Oleh-Holiday. How soon after I file will my rebate come? (I've often wondered: you know how America gives Israel $3 billion in foreign aid each year? If they added the tax rebates that made their way into Israeli homes, how large would that number really be?)
Over Pesach at our cousins home in Otniel, I asked him whether his children were legal American citizens. (He knew exactly what I was asking: do you get money from the U.S. government.) He said something I have never heard anyone say before. "Do I look like I need tzedakah? Am I poor?" (Actually, according to the IRS, he really is poor, with eight children and I'm sure a modest salary.) "Baruch Hashem, I'm able to put bread on the table. I've got a home to live in. I'd rather not take the charity."
I really respected his answer. He's leaving thousands of dollars on the table that he could really, really use that he could access legally because of the obvious principle that you shouldn't take tzedakah that you don't need; the act of taking by itself is damaging; that we really should hate "free gifts" from others.
While I truly respected his answer, does this mean that I'm not going to file my taxes in the U.S.? No way. (First of all, I did have income, which I have to report. And I don't even know if you can refuse a refund you're eligible for when you do report.) If I'm eligible for the rebate - which I'm pretty sure I am - I'm not going to turn it down.
But my willingness to "take" makes it harder for me to criticize others who also legally find ways to live off the generosity of the American taxpayers. People who live in glass houses...