Olmert Demands Taxes on Donated Items for Israel's Needy
By Debbie Berman - Arutz 7 17:08 Jan 05, '06 / 5 Tevet 5766
www.israelnationalnews.com/news.php3?id=96102

Acting Prime Minister and Finance Minister Ehud Olmert demanded last month
that taxes be paid on charity items recently donated by American Jews to
help Israel's needy population prepare for winter.

Olmert's act raised a storm of angry criticism from Israeli and U.S. Jewish
leaders, and has also created an unusually tense diplomatic climate sparking
claims that trade treaties between Israel and America have been breached.

According to a report in the Los Angeles Times, Olmert made the decision to
enforce an old, outdated law demanding a 28.5% tax and an additional airfare
tax on U.S. charitable donations to Israel's poor. The donations, which
include medical supplies, clothing and toys, were the result of a charity
drive in Jewish communities across the U.S. aimed at delivering the
contributions to Israel in time for the holiday of Chanukah. While Olmert's
staff refused to grant a reduction in the taxes that would allow the release
of the charity items, Olmert himself took part in a press interview at a Tel
Aviv soup kitchen, in an apparent move to publicize his concern for Israel's
poor and needy.

A spokesperson at Olmert's office in the Ministry of Finance claimed the
decision was made to protect Israel's second-hand garment industry:
"The law is explicit and has been in effect for decades. It is designed to
protect the Israeli second-hand garment industry. If American donors want to
assist Israel's poor, they should send money and have clothing purchased in
Israel for donations. The Ministry has looked into the matter at the very
highest level of the Office of the Minister himself. The law to tax
charitable donations is explicit, and no reduction of any kind can be
considered. The American donors should have considered this consequence
prior to engaging in so ambitious an undertaking."

Israel Textile Union Chairman Ramsi Gabai denied the above claim:

"There has not even been a second-hand garment industry in Israel for 30
years. It is an absurdity to suggest that taxing American charity in any way
defends the Israeli garment industry, or that such protection is at all
desired by the Israeli textile industry. There is a Free Trade Agreement
with the United States on all garments, which certainly covers charity if it
covers items sold for profit. We ourselves at the Textile Union have a very
large and successful program for the member firms to donate excess clothing
inventory to charity. Are we to be taxed on our charity to the needy next?"

A spokesperson at the U.S. Embassy expressed frustration at the audacity of
being taxed on charitable donations:
"There is no exemption from the Free Trade Agreement ratified with the State
of Israel that would permit taxation of American citizens donating charity.
The contention seems more bizarre than weak. The United States need not
specifically include in its Free Trade treaties the self-evident inclusion
of charitable donations for emergency relief in addition to commercially
sold goods for profit. Did the Indonesians charge taxes on American
charitable relief from the tsunami? Did India tax American charity donated
after the killer monsoons? Did the Chileans tax American donations after the
earthquake?"

Due to the unresolved crisis, more than 30 tons of donated clothing, toys,
and medical supplies intended for Israel's needy have been stranded for
three weeks in warehouses at Israel's Ben Gurion International Airport. The
California-based donors who organized the charitable drive are not willing
to pay the heavy tax imposed by Olmert's office.

Labor Party Economic Advisor and Knesset candidate Prof. Avishai Braverman
attacked Olmert's decision and the entire Sharon Administration for its
continued "callous and heartless" policies:
"We have become a truly heartless people during the Sharon Administration,
to my deep regret. How blatant can the present government be in its
mistreatment of the poorest citizens? ... This is much more than simple
stupidity; it is a basic lack of humanity."

MK Effie Eitam (National Union) attempted to reassure American supporters of
Israel that the Knesset would never allow Olmert's decision to stand:
"There has never been a Knesset - Likud or Labor, right or left, capitalist
or communist - that has ever contemplated taxing American charity to Israel's
neediest. There never will be such a Knesset. Please do not let this
temporary madness stop your wonderful efforts in assisting our neediest
citizens. They should not be left to suffer for the stupidity of the present
administration."

Many American Jewish leaders, who have traditionally been among Israel's
greatest supporters, voiced their anger at the situation. These included
Rabbi Norman Lamm, the Chancellor Emeritus of Yeshiva University, as well as
Rabbi Pesach Lerner, the Executive Vice-President, National Council of Young
Israel Synagogues.

"It is the obligation of the American Jewish community," Rabbi Lamm stated,
"not to remain silent to this outrage but to openly confront the Israeli
government with the loud message: this is completely unacceptable. It is
unacceptable in terms of all common decency. It is unacceptable in terms of
all Western culture, and it is particularly unacceptable in its violation of
every tenet of Judaism."

Rabbi Lerner said, "It is unheard of that donations of anything, especially
clothing for children and adults who need such clothing to keep warm, should
be held up by a government for customs taxes when that government and its
agencies should themselves be supplying such assistance. The Jewish people
are known for their concern for others. This government action is shameful."