Mada al-Carmel – The Arab Center for Applied Social Research has published a new position paper titled “Bribes and the Ballot Box: How Israel’s 2026 Budget Serves the Governing Coalition ,” authored by Dr. Mtanes Shihadeh, Director of Mada’s Israel Studies Program.
This paper discusses the economic and financial agenda for 2026 in the form of a draft budget and an Economic Arrangements Law that will serve as the economic action plan for the new fiscal year. However, since 2026 is an election year, this will be the last budget before Israelis go to the polls.
The paper argues that Israel’s governing coalition is seeking to exploit the “political business cycle” for its own electoral advantage. After imposing higher taxes on all citizens for the last two years, the government now wants to cut taxes for specific segments of the population while imposing new taxes on other groups in the middle and upper classes. The intention is to avoid angering large constituencies of Israeli society by imposing what would be considered acceptable and required taxes. These steps follow a series of fiscal cuts and raised taxes introduced by the government to cover an increase in the military budget amid declining revenues.
To read the full paper in English, click here.
To read the full paper in Arabic, click here.
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