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Sunday, January 24, 2010

Charitable Contributions for Haiti’s Earthquake Victims

Molly F. Sherlock
Analyst in Economics

On January 12, 2010, a magnitude 7.0 earthquake struck Haiti. As of January 20, 2010, 72,000 had been confirmed dead with hundreds of thousands more in need of assistance. The earthquake has left an estimated 1.5 million Haitians homeless. Congress has passed legislation with the goal of promoting charitable donations for the earthquake victims in Haiti. Similar action was taken following the 2004 Indian Ocean tsunami and the 2005 Gulf Coast Hurricanes, when Congress enacted legislation to promote charitable giving to organizations providing aid to victims of these natural disasters. 

On January 20, 2010, the House passed the Haiti Assistance Income Tax Incentive Act (HAITI Act; H.R. 4462), a bill to accelerate the income tax benefits for charitable cash contributions for the relief of earthquake victims. The Senate introduced companion legislation (S. 2936) on January 20, 2010, but passed the identical House legislation H.R. 4462 on January 21, 2010. If enacted, the HAITI Act would allow taxpayers making charitable contributions of cash made to organizations providing aid to earthquake victims after January 11, 2010, and before March 1, 2010, to take the associated charitable deduction on their 2009 income tax returns. A similar provision, discussed in greater detail below, was adopted under P.L. 109-1 following the 2004 Indian Ocean tsunami. The Joint Committee on Taxation (JCT) estimates that the HAITI Act would result in revenue losses of approximately $2 million over the 10-year budget window spanning FY2010 through FY2019. 

Under current law, charitable contributions to 501(c)(3) charitable organizations from individuals, corporations, and estates and trusts are tax deductible in the year they are made. Individuals can deduct up to 50% of their adjusted gross income (AGI), phased-out for higher income individuals. Corporations can deduct up to 10% of their taxable income. Individuals and corporations can carry forward any unclaimed charitable deductions for up to five years. Total charitable giving in 2008 was $307.65 billion. 

In the past, Congress has passed legislation to encourage charitable giving following natural disasters. Following the 2004 Indian Ocean tsunami, legislation was passed that allowed taxpayers making charitable contributions to aid tsunami victims in January 2005 to take the charitable deduction on their 2004 tax return. This provision is similar to the one proposed in the HAITI Act. In September 2005, following Hurricane Katrina, individual and corporate giving limits were suspended. The rules surrounding charitable contributions of food inventory and books were also relaxed to encourage in-kind giving. 

The HAITI Act, like other tax policies, can be evaluated along the dimensions of efficiency and equity. Efficiency is greatest when the policy's marginal impact, the giving induced by the program, is large relative to the policy's inframarginal impact, the benefits given to those whose behavior was not directly caused by the tax policy. Using this framework, the HAITI Act is unlikely to be economically efficient. In general, tax benefits for charitable giving do not appear to significantly increase donations. Furthermore, tax deductions violate principles of vertical equity in that the benefits of tax deductions accrue disproportionately to higher income groups and provide larger benefits to those with a greater ability to pay.

Date of Report: January 22, 2010
Number of Pages: 13
Order Number: R41036
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail or call us at 301-253-0881.

U.S. Immigration Policy on Haitian Migrants

Ruth Ellen Wasem
Specialist in Immigration Policy

The environmental, social, and political conditions in Haiti have long prompted congressional interest in U.S. policy on Haitian migrants, particularly those attempting to reach the United States by boat. While some observers assert that such arrivals by Haitians are a breach in border security, others maintain that these Haitians are asylum seekers following a decades old practice of Haitians coming by boat without legal immigration documents. Migrant interdiction and mandatory detention are key components of U.S. policy toward Haitian migrants, but human rights advocates express concern that Haitians are not afforded the same treatment as other asylum seekers. 

The devastation caused by the January 12, 2010, earthquake in Haiti has led Department of Homeland Security (DHS) Secretary Janet Napolitano to grant Temporary Protected Status (TPS) to Haitians in the United States at the time of the earthquake. The scale of current humanitarian crisis—estimated thousands of Haitians dead and reported total collapse of the infrastructure in the capital city of Port au Prince—resulted in this TPS announcement on January 15, 2010. 

More broadly, there are concerns that the crisis conditions in Haiti may result in mass migration from the island. Agencies within DHS that are the leads in handling a potential mass migration include the U.S. Coast Guard (interdiction); Customs and Border Protection (apprehensions and inspections); Immigration and Customs Enforcement (detention and removal); and the U.S. Citizenship and Immigration Services (credible fear determinations). The balancing of DHS's border security and immigration control responsibilities in the midst of a humanitarian disaster poses a challenge.

Date of Report: January 15, 2010
Number of Pages: 12
Order Number: RS21349
Price: $29.95

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Wednesday, January 20, 2010

Haiti Earthquake: Crisis and Response

Maureen Taft-Morales
Specialist in Latin American Affairs

Rhoda Margesson
Specialist in International Humanitarian Policy

The largest earthquake ever recorded in Haiti devastated parts of the country, including the capital, on January 12, 2010. The quake, centered about 15 miles southwest of Port-au-Prince, had a magnitude of 7.0. A series of strong aftershocks followed. Witnesses are describing the damage as severe and catastrophic. Communication services were cut off by the earthquake, so detailed information has been limited. Initial reports indicate that thousands of buildings collapsed, leaving unknown numbers of people trapped, and tens of thousands of people homeless in the streets. Early estimates of casualties are constantly being updated, but already reach into the hundreds of thousands. According to the Secretary-General of the United Nations, "[o]f Haiti's 9 million people, initial reports suggest roughly a third may be affected by the disaster." About 45,000 US citizens live in Haiti, and the Embassy has been asked to help account for about 3,000 of them. 

Describing conditions in his country as "unimaginable" following the earthquake, President Preval appealed for international assistance. The country's top priority was to conduct search and rescue operations for survivors. Other priorities included an offshore vessel medical unit and electricity generation capability. The government also requested communications equipment so that government officials can better function and coordinate response efforts. The Haitian government, the United Nations, and donor representatives met in Haiti on January 14 to coordinate their efforts. 

The arrival of humanitarian supplies has begun, but access to Port-au-Prince and the distribution of aid to people in need is difficult and hampered by a number of significant challenges that are impeding rescue efforts and movement. People are gathering in open spaces and some are reportedly leaving Port-au-Prince for other areas in Haiti. 

On January 12, 2010, President Obama assembled heads of agencies to begin working immediately on a coordinated response to the disaster. On January 13, 2010, U.S. Ambassador to Haiti Kenneth H. Merten issued a disaster declaration, and the U.S. Agency for International Development (USAID) through the Office of Foreign Disaster Assistance (OFDA) authorized $50,000 for the initial implementation of an emergency response program. The U.S. embassy in Haiti also began facilitating the evacuation of U.S. citizens. On January 14, President Obama announced $100 million in humanitarian assistance to Haiti to provide significant resources to meet the immediate needs on the ground. The relief effort is expected to last for many months, although it is anticipated that recovery and reconstruction will begin as soon as possible in a parallel effort. 

The Department of Homeland Security (DHS) announced on January 13, 2010 that it is temporarily halting the deportation of Haitians. On January 15, 2010, DHS Secretary Janet Napolitano granted Temporary Protected Status (TPS) for 18 months to Haitian nationals who were in the United States as of January 12, 2010. 

The focus of this report is on the immediate crisis in Haiti as a result of the earthquake and the U.S. and international response to date.

Date of Report: January 15, 2010
Number of Pages: 21
Order Number: R41023
Price: $29.95

Document available electronically as a pdf file or in paper form.
To order, e-mail or call us at 301-253-0881.