Israeli Lawmaker Introduces Bill to End Double-Taxation of Americans in Israel

Israeli Lawmaker Introduces Bill to End Double-Taxation of Americans in Israel

Knesset member Simcha Rothman introduced a measure to exempt American citizens subject to Social Security taxes from paying the equivalent in Israel.

American citizens who live in Israel are currently required to pay a version of Social Security taxes in both countries—the standard Social Security tax in the United States, and the tax to fund “bituah leumi,” Israel’s version of Social Security, in Israel. 

Now, an Israeli lawmaker is pushing to eliminate that. 

According to the Jerusalem Post, an amendment introduced by Simcha Rothman, a member of Israel’s Knesset who represents the Religious Zionist Party, would make American citizens living in Israel who have already paid their Social Security taxes exempt from paying a similar tax in Israel. 

“Why pay double?” Rothman asked in a Facebook post cited by the newspaper. “If you have dual citizenship, Israeli-American or American-Israeli, you probably know this one. You have to pay double bituah leumi on any income.” 

Rothman is from a family that immigrated to Israel from the United States, although he was himself born in Israel. 

"I can change the Israeli law in order to assist U.S. citizens in Israel, many of them suffering financially because of this unfair situation,” Rothman said, per the Jerusalem Post. 

The proposal comes amid a time of political uncertainty in Israel. The current government, consisting of a diverse slate of political parties and figures opposed to former Prime Minister Benjamin Netanyahu, is scheduled to dissolve this week. That will bring to an end the tenure of Prime Minister Naftali Bennett, with Yair Lapid set to assume the top post until after the next election, which is expected to take place in October. That election will be Israel’s fifth in three years. 

Amid the turmoil, President Biden is scheduled to visit Israel during his Middle East trip next month. 

“The Bennett-Lapid government was an incongruous collection of eight parties spanning numerous divides of ideology and identity, with not a single vote to spare,” Daniel Shapiro, former U.S. ambassador to Israel, wrote last week. “Its collapse had been predicted since the day it was sworn in, and the fact that it lasted a year, passed a budget, and governed well only means that it exceeded expectations. But, with Biden having pledged many months ago to visit Israel this year —the perfectly natural thing to do for a politician possessing decades of intimate engagement with and deep support for the US-Israel relationship—this possibility was certainly factored in.”

Rothman, in his comments to the Jerusalem Post, referenced the political changes. 

“My bill to eliminate those double payments will take place in the Cabinet Committee for Legislation,” he said. “I convinced [lawmakers] from both sides of the political spectrum to co-sign this bill and I will do my best in order to be a foot in the door to build upon during the 25th Knesset.”

Rothman added that he can only influence the law in the country where he is an elected representative. 

“I cannot influence the American law, but I can change the Israeli law in order to assist U.S. citizens in Israel, many of them suffering financially because of this unfair situation,” he added.

Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Image: Reuters.