Israel National News Arutz 7  January 05, 2006

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According to a report in the Los Angeles Times, Olmert made the decision to enforce an old, outdated law demanding a 28.5% tax and an additional airfare tax on U.S. charitable donations to Israel’s poor.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 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."

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