The Congress Should Change Laws

A recent article in The New York Times states:

As the American government seeks to end the four-decade Jewish settlement enterprise and foster a Palestinian state in the West Bank, the American Treasury helps sustain the settlements through tax breaks on donations to support them.

A New York Times examination of public records in the United States and Israel identified at least 40 American groups that have collected more than $200 million in tax-deductible gifts for Jewish settlement in the West Bank and East Jerusalem over the last decade. The money goes mostly to schools, synagogues, recreation centers and the like, legitimate expenditures under the tax law. But it has also paid for more legally questionable commodities: housing as well as guard dogs, bulletproof vests, rifle scopes and vehicles to secure outposts deep in occupied areas.

Currently U.S. law bars the provision of any aid, service, expert advice, or personnel to an organization designated by the US government as a terror group. According to The Christian Science Monitor:

The law – part of the USA Patriot Act – makes it a federal crime to provide any help or support to a terror group – even support designed to teach a violent group how to use legal and peaceful means to achieve political change.

Recently the Supreme Court decided that this law did not violate the constitutional protection of free speech.

It has been suggested that the prohibition of funding of the Hamas government of the Gaza strip has serious humanitarian impact on the Palestinian people.

I think of the tax breaks for donations to foreign aid organizations as "tax financing". If you are pay 35 percent taxes on the highest portion of your income, and make a donation of $10,000 to a tax exempt organization, your taxes are reduced by $3,500 as a result. In effect, you are giving $6,500 to the organization and the government is giving $3,500.

In general this is a great policy. It encourages people to donate to worthy causes. It also assures that the government is aiding organizations that the citizens wish to support, indeed often funding very worthy and cost-effective programs.

The volume of that tax financing is quite large, amounting to billions of dollars.

The problem of course is that sometimes a portion of the citizens want to give their money to support efforts which are directly contrary to government policy. It is hard to see why tax breaks should be given for such donations, especially seeing those tax breaks as government contributions to the selected activiites.

Perhaps the Congress should reexamine the law. On the one hand, it seems foolish to prevent programs to promote peace education and non-violent means of conflict resolution. On the other hand, it seems foolish to give tax breaks to people donating money supporting Israeli settlements in Palestinian territory or other activities that directly counter U.S. policy.