Israel is democratic. The national and local governments actually run things, the representatives to the national and local governments are popularly elected by all of the country's citizens, and citizenship includes Jews, Muslims, Christians, Baha'i, atheists, men, and women, whether or not they own land.
local, state, and national governments
local, state, and federal
taxes
taxes
taxes
Local governments can make laws, which is a significant way they affect citizens. Local governments can, for example, enact smoking bands, raise or lower taxes, and create educational policies.
U.S. or foreign citizens Universities State and local governments
local state and federal
I believed they are shared between state and local governments
The "leaders" of local and national governments are "chosen" by elections, in which all citizens vote. That includes male, female, land owners, and non-landowners, of any religion and ethnic background. None of these factors is a 'test' or requirement for citizenship. The structure of Israel's national government is similar to the national governments of Canada, Australia, Japan, the UK, and others. (But not the USA.)
Income-taxing authorities are any entity to which the law imputes the right and power to collect income tax. These are the federal government, State governments, and local or municipal governments, where the grants of this power are made by the State to the local or municipal governments, and not simply exercised by local and municipal governments on behalf of the State.