The Israeli government plans to raise income taxes next year by one percent for those earning more than 5,000 shekels (1,250 U.S. dollars) a month, the Finance Ministry said Friday.

The step is expected to be part of the package of tax increases and budget cuts the cabinet is set to approve on Monday.

Furthermore, a tax on high-income individuals will apply to those earning 800,000 shekels (200,000 dollars) annually, down from the current level of 1 million shekels (250,000 dollars).

In a two-hour meeting between Finance Minister Yuval Steinitz and Yisrael Beytenu (Israel is Our Home) leader Avigdor Liberman Friday, the latter offered support for the package of changes, according to The Jerusalem Post.

Prime Minister Benjamin Netanyahu's associates have hinted in closed conversation that Netanyahu sees Monday's vote as a bellwether for how hard it will be for him to pass the budget.

The vote on the budget is seen as the indicator of whether Netanyahu will need to initiate early elections. If he sees that he cannot obtain enough support to pass the budget, he is expected to initiate early elections in October that is scheduled to be held at the beginning of 2013.

However, if he can get Yisrael Beytenu, Habayit Hayehudi ( Jewish Home) and the Independence party to support the budget and a few opposition Knesset (Parliament) members to abstain, in order to pass it, Netanyahu may be able to complete his term which is set to end officially on Oct. 22, 2013.

The only ministers who have said they will vote against Steinitz's plan on Monday are the four ministers from Shas. Shas traditionally votes against the budget in the cabinet whether or not they are in the coalition.

Labor leader Shelly Yechimovich also responded Friday to the announcement, deriding Netanyahu for his spate of recent " contradictory" economic policy announcements.

"You could get dizzy from all of Netanyahu's contradictory economic decisions in the last three days," Yechimovich said.