The Davos production team’s registration glitches were hard to navigate - watching hours-long lines just to collect a participant badge was disappointing. The organization still isn’t fully stitched together, even after decades of convening the Forum, though you could chalk it up to festival charm. There are no proper accommodation arrangements, and for some reason, the production team sees nothing wrong with rooms renting for $22,000 or more that week, or with every restaurant in town being bought out for private events.

But in terms of personal experience, it’s like arriving at an economic amusement park. The place is draped in white; there’s an atmosphere of support and cooperation, at least among the Israelis with us. The foreigners we met received Israelis better than we’d heard in previous years; even the Governor of the Bank of Israel noted this in an interview with us. We enjoyed spending time with our team, the leaders you unexpectedly encounter on the street... The arrival, the settling in, all of it overwhelmed me for the first two days. By the third day, I had already left.

Beyond that, many discussions I didn’t attend were held behind closed doors. What you see on the outside is something completely different from what went on inside.

Fink plays with other people’s money

One such event was hosted by Larry Fink, CEO of BlackRock, which manages $14 trillion in assets. Fink sits on the World Economic Forum’s Board of Trustees and leads a progressive policy with other people’s money while pursuing a capitalist policy with his own. This year, he hosted a prestigious dinner in Davos where U.S. Secretary of Commerce Howard Lutnick delivered a Trump-style speech. Lutnick argued that European economies are lagging behind the United States because of failed ESG policies, and called their net-zero goals delusional.

He scoffed at Europeans who chain themselves to green energy goals while relying entirely on Chinese battery production. Europe, he said, is effectively swapping carbon emissions from oil and gas for the environmental destruction of cobalt and lithium mining, a significant portion of which relies on child labor in the Congo.

According to social media accounts, the audience giggled nervously and grew annoyed. Christine Lagarde, who had passed us by just a short while earlier, stormed out of the hall to make a point. Former Democratic Vice President Al Gore reportedly booed mid-speech. Fink tried to calm the waters and chose to end the event early, before dessert was served. Such is the nature of discussions with liberals who aren’t really willing to hear other opinions.

California’s Governor brings out the kneepads

California Governor Gavin Newsom arrived in Davos to trash-talk Donald Trump. He called on European leaders to “Punch Trump in the face,” literally. Then he pulled out red kneepads, a joke about world leaders “bending the knee” to America, and bragged about his successes.

This is the governor of California, a state with the highest poverty rate in the U.S., a mass exodus of businesses and residents, catastrophic wildfires worsened by mismanagement, a high-speed rail project to nowhere, and a homelessness crisis that exploded despite billions poured into it.

Yet Alex Soros praised Newsom as the “real star” of Davos. The younger Soros, of course, hasn’t achieved much on his own; instead, he uses his father’s money to fund radical political candidates and progressive causes. Many had probably never heard him speak before last week’s Davos event, but someone wrote that “Kamala Harris suddenly looks like a genius next to him.”

The U.S. sneers at Europe

Many Americans came with the goal of telling all these people the truth to their faces: Donald Trump at the helm, of course, but also Elon Musk, Howard Lutnick, and Ken Griffin. They all gave speeches and mocked a Europe that is willingly destroying itself.

Trump’s front came prepared. They scattered the messages across their speeches and stated the facts as they see them: Germany closed all its nuclear power plants in the name of fighting climate change, replacing reliable nuclear energy with solar panels in a country where the sun barely shines, then acted surprised when energy prices skyrocketed. European governments spend billions housing immigrants while local populations struggle to afford basic needs.

This failed policy cocktail, immigration, “social justice,” climate, and misaligned economic priorities, all began at the World Economic Forum, where a group of people who thought they were smarter than everyone else set out to reshape the world in their own image.

Klaus Schwab, founder of the World Economic Forum, has not hidden his goals since the early 1970s: to advance a progressive agenda. When the COVID pandemic broke out, he published a book, The Great Reset, arguing that the pandemic created a “unique window of opportunity” for global elites to reshape national economies, “the priorities of societies, the nature of business models, and the management of the global commons.”

He has openly bragged about the world leaders who passed through his personal mentorship program, known as “Young Global Leaders.” In 2017, Schwab boasted: “What we are very proud of is that we penetrate the cabinets of governments around the world.” Justin Trudeau is perhaps his most famous protégé; he spent nearly a decade turning every sensible economic policy in Canada into a green fantasy.

The damage is plain to see. The gap in GDP per capita between Canada and the United States widened by 144% during Trudeau’s tenure. The OECD predicts Canada will rank last among developed countries in GDP per capita growth by 2060.

Europe isn’t much better. Today, Mississippi, the poorest state in the U.S., has a higher GDP per capita than France, Italy, and the UK, and is closing in on Germany. Davos is the embodiment of progressive European policy: a leading partner in its design, and still refusing to acknowledge the damage.

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The central mechanism of the incentive is a temporary, five-year exemption on a portion of income earned from work in Israel, with the maximum exemption amount decreasing annually from one million NIS in 2026-2027 to 150,000 NIS by 2030. The new tax break supplements existing benefits and specifically aims to motivate recipients to move their active professional and business operations to Israel.

The primary stated objective of this proposed legislation is to encourage the immigration of individuals from higher socioeconomic brackets to Israel. The proposal mentions increased global anti-semitism, and acknowledges that such immigrants would boost the Israeli economy.

This measure is set as a temporary provision applying only to those who become residents in 2026.

What’s new in this proposal:

In addition to existing benefits that exempt foreign-sourced income, this proposal exempts income earned within Israel from work or active business for five years through 2030.

The exemption caps decline annually:

₪1M in 2026-2027;
₪600K in 2028;
₪350K in 2029;
₪150K in 2030, before reverting to standard taxation in 2031.

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Proportionality provision:

While the annual cap for 2026 is indeed 1 million NIS, the source specifies that for the 2026 tax year specifically, the exemption ceiling is proportional to the amount of time the person was actually a resident in Israel during that year.

The benefit stacks with existing 10-year foreign income exemptions and tax credit points, meaning eligible immigrants can combine both incentives. Income above the caps is taxed at standard rates.

What does the immigrant tax proposal mean?

In Israel, there are several non-profit organizations that promote the economic integration of immigrants and track their outcomes. We spoke with Abbey Onn, CEO of Nevo Network, one such organization that yesterday received a national award from President Herzog for extraordinary contributions to immigrants.

Onn told us,

“It’s great to see confirmation that immigrants boost the Israeli economy. By spreading benefits over a five-year period, this may be a positive sign from of the government that retaining Olim is just as important as attracting them. This is a good start, but I would like to see more done.”

Eligibility for new tax benefits:

Eligibility requires becoming an Israeli tax resident for the first time (or returning) during the 2026 tax year, with either Oleh status or a Veteran Returning Resident certificate from the Ministry of Aliyah and Integration.

The exemption applies only to “income from personal labor,” excluding passive income or payments from relatives unless sourced from a company fully owned by the immigrant.

The Treasury projects gradual revenue loss starting at ₪40M in 2026 and peaking at ₪160M in 2030, betting that economic growth from new high-earners will offset the tax forgone.

More reactions to the proposal so far:

Comments published on the proposal include concerns about fairness to existing citizens who have made certain sacrifices:

“Such legislation benefits those who did not serve in the army, did not contribute anything to the State of Israel while abroad, and will now receive benefits and health services at the expense of Israeli citizens who pay taxes all their lives, volunteer for the army, and fight for the state.”

Another comment highlights the perceived inequality:

“A reform that rewards those who left and ignores those who stayed creates structural and inappropriate discrimination.”

A third point is made about the need to get more specific in the definitions of professions who benefit in the tax breaks:

“The proposed exemption is a sweeping exemption. There is no distinction between types of immigrants, fields of occupation, or potential economic contribution. A wise policy should have focused the benefits on immigrants with required professions, entrepreneurs, investors, or those who bring real human or financial capital that will contribute to the Israeli economy.”

Public comment open:

The proposal is open for public comment until December 17th, 2025 via signing in to the Ministry of Justice website, and unfortunately, the interface is only in Hebrew, like many official platforms in Israel.

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Share your thoughts with us via: global@tv10.co.il or the Newsroom WhatsApp: +972-55-994-5851.

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The headlines last week were celebratory. The latest wage data showed that the average salary in Israel hit ₪13,321, up 2.7% year-over-year.

But if you’re standing in the supermarket checkout line watching your grocery bill climb while your paycheck stays flat, you’re not imagining it. The mathematical mean often betrays lived reality.

To understand the truth about purchasing power in the Israeli household, we must strip away the statistical mirage and look at the two forces tearing the average apart: inflationary friction and high-tech decoupling.

The focus of this article is the last year - but it is important to note that the story can look different when taking a longer view. On a 10 year basis, real wages (adjusted for inflation) have grown approximately 25-30% over the decade.

The average is a mathematical comfort blanket

One of the most misleading tools in economics is the average - a mathematical comfort blanket politicians wrap themselves in to avoid cold reality. The average suggests unity, a shared fate. But the latest data reveals the Israeli economy as a tale of two divergent realities.

This is what economists call “statistical blindness,” when aggregate data obscures individual experience. The national average suggests shared prosperity. But averages lie when distribution is lopsided. And in Israel, the distribution is extremely lopsided.

While tech salaries surged 6.3%, the vast majority of the workforce - teachers, nurses, service workers - saw real wages grow by just 0.2% after accounting for 2.5% inflation. Strip away the tech sector outliers, and Israel’s celebrated wage growth vanishes.

The inflation trap: an illusion of growth

We suffer from illusions about money, the tendency to think in nominal rather than real terms. A 2.7% raise feels like progress. But while the numbers rise, the value of the currency itself constantly erodes.

We see it in our morning ritual. Just a few years ago, a ₪10 coin was enough for a cappuccino. Today, that same coin leaves you in deficit. You are forced to dig deeper and add another ₪3 just to get the exact same cup.

With inflation running at 2.5% (Bank of Israel, 2025), that raise evaporates before it hits your account.

• Nominal growth: +2.7%

• Real cost increase: +2.5%

• The result: 0.2% real wage growth. Stagnation.

But average inflation is just as deceptive as average salary. The Consumer Price Index is a blunt instrument, a broad basket of hundreds of items. The middle and lower classes don’t buy the basket, they buy essentials. Their spending is heavily weighted toward food, where inflation has aggressively outpaced the general index.

The math is unforgiving: If your salary rose 2.7% but your grocery bill jumped 4%, you are empirically poorer today than a year ago.

But inflation is only part of what’s eating your paycheck.

High-tech distortion: an NBA player in a kindergarten

Another reason the data shows growth you don’t feel is the high-tech distortion.

The technology sector has essentially seceded from the local economy. With an average salary of ₪33,366, a surge of 6.3% (Central Bureau of Statistics, December 2025), it operates in a different stratosphere. This outlier effect exerts a gravitational pull on the national data, artificially inflating the average until it no longer resembles the typical worker’s reality.

Think of it this way - an NBA player walks into a kindergarten class. Suddenly, the average height shoots up. But none of the children grew taller. The statistic changed. The reality did not.

This is the Israeli labor market in 2025. The high-tech sector pulls the national average upward, masking stagnation among the middle class who make up the vast majority of the economy.

The numbers tell the story:

• Tech workers: +6.3% nominal growth = +3.8% real growth (after inflation)

• Everyone else: +2.7% nominal growth = +0.2% real growth (after inflation)

Tech workers are getting ahead. Everyone else is treading water.

The bottom line

We are witnessing the bifurcation of the economy. There is the export economy of high-tech, which beats inflation and imports global wealth. And then there is the domestic economy, which is slowly being ground down by the friction of rising prices.

If you feel the squeeze at the supermarket despite the celebratory headlines, don’t doubt your instincts. The real numbers prove you are right.

The “average” looks fine. This year, at least, ordinary people are not.

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TV10 Global | Israel for Investors

Bringing you the top stories from the Israeli business community, by Israel’s only business and finance network.

Share your thoughts with us via: global@tv10.co.il or the Newsroom WhatsApp: +972-55-994-5851.

📧 Subscribe to our newsletter! And follow the daily conversation on 𝕏 @tv10global.

Pings available via WhatsApp Channel.