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© The Hindu
Yesterday, it was announced that an astounding 1 in 6 Americans are living in poverty. President Obama's response? To demand a tax on donations to soup kitchens and other charities that help people desperately in need. The President's proposal will impact approximately 40% of all the tax deductible contributions, and essentially penalize soup kitchens, hospitals, and churches that provide essential services to those who need them most. It's no wonder this tax hike has been rejected on both sides of the aisle.

Background:

US Poverty Rate Swells To Nearly 1 In 6. The ranks of America's poor swelled to almost 1 in 6 people last year, reaching a new high as long-term unemployment left millions of Americans struggling and out of work. The number of uninsured edged up to 49.9 million, the biggest in more than two decades. The Census Bureau's annual report released Tuesday offers a snapshot of the economic well-being of U.S. households for 2010, when joblessness hovered above 9 percent for a second year. It comes at a politically sensitive time for President Barack Obama, who has acknowledged in the midst of a re-election fight that the unemployment rate could persist at high levels through next year. The overall poverty rate climbed to 15.1 percent, or 46.2 million, up from 14.3 percent in 2009. (The Associated Press, 9/13/11)

Ways & Means Ranking Member Sander Levin Has Opposed The President's Effort To Raise Taxes. Rep. Sander Levin (D-Mich.), who is the ranking member on the tax-writing Ways and Means Committee, delivered a speech in June in defense of many of the same tax deductions Obama is now targeting. "In the case of the charitable deduction, one has to keep in mind that the recipients of the contributions include universities, hospitals, churches and soup kitchens that provide critical services to working families," Levin said. (Roll Call, 9/14/11)

Majority Leader Cantor: It Doesn't Make Sense To Impose Taxes On Charitable Contributions When The Charities Are The Ones Out There Helping People. We have also found out through looking at his tax proposals, or at least the reports, that his tax proposals are going to impose taxes on charitable contributions and in fact impact at least 40 percent of tax deductible charitable contributions. I don't think there are many Americans right now who think that's a good idea. The question is why would we want to put an impediment in the way of the charities accessing funding when the charities are the ones out there helping the people in need right now? It doesn't make sense. (Remarks At The American Action Forum, 9/13/11)

Flashback:

House Ways And Means Chairman Charlie Rangel (D-NY): "I Would Never Want To Adversely Affect Anything That Is Charitable Or Good." "President Barack Obama's call to raise taxes on high earners and greenhouse gas polluters met fierce opposition Tuesday from congressional Republicans and also a few Democrats. 'I would never want to adversely affect anything that is charitable or good,' Rep. Charles Rangel, D-N.Y., chairman of the tax-writing House Ways and Means Committee, said of Obama's call to limit high-income taxpayers' itemized deductions for charitable donations and mortgage interest." (The Associated Press, 3/3/09)

Representative Shelley Berkley (D-NV): It's "A Nonstarter." "Rep. Shelley Berkley (D-Nev.) called the proposal 'a nonstarter,' telling Geithner: 'I'd like to think that people give out of the goodness of their hearts, but that tax deduction helps to loosen up their heartstrings.' Outside the hearing, Berkley said the proposed tax increase was 'the number one issue' on the minds of her constituents over the weekend. Reminded that the provision is intended to raise hundreds of billions of dollars to finance an expansion of health insurance coverage, Obama's top domestic priority, she said: 'We can find another way.'" (The Washington Post, 3/4/09)

Senate Finance Chairman Max Baucus (D-MT): "I'm Wondering About The Viability Of That Provision." "Sen. Max Baucus (D., Mont.), the Senate's top tax writer as chairman of the Finance Committee, told Mr. Geithner he was especially concerned about paying for expanded health coverage with a deductions curb that 'has nothing to do with health care.' He added: 'I'm wondering about the viability of that provision.'" (The Wall Street Journal, 3/5/09)

Senator Bob Menendez (D-NJ): "I Don't Want To Prejudge Anything, But It Is Certainly One That I Am Having Difficulties With." (The Associated Press, 3/5/09)

Whip Cantor: The President's Plan Could Cost Charities Billions. "It just defies logic as to why we would want to put up a disincentive for people to give to charities, especially when so many people are in a desperate state in our economy," Cantor told CNSNews.com after a press conference on Wednesday. "We need charities now - we need them operating at full throttle so I am full-force opposed to what he is trying to do ... Cantor said the plan could cost charities billions of dollars. "That doesn't make sense," he said