In another “Obama-nation”, the president's proposal to limit itemized tax deductions for “the rich” (that's anyone who's not on welfare) is meeting opposition from... guess who. A bunch of conservative fat cats? Nope – it's the _Democrats_ who don't like it, allegedly because it might have a negative effect on charities. This is, of course, hypocrisy of the first order, for two reasons at least. Firstly, as far as liberals are concerned, the less money that goes to charities the more is available for them to tax and spend on corrupt, wasteful, and lame-brained government programs. When it comes to the imagined (by them) competition between non-government charity and government “charity” in all of its myriad forms, it's no contest – the government kind is better because it expands the liberal power base, increases dependency on the government, gives them more money to play with, and enables them to engage in bigger and better social engineering schemes. So worry not – there is joy in the halls of liberalism every time a charity that runs on voluntary contributions (vs. confiscatory taxation) goes under.
Secondly, one has to recall that, over the past couple of decades, the Democrats have become – firmly and irrevocably – the party of not only the poor, but of the poor and the rich, with the middle class, AKA "taxpayers", crushed in the middle with their only hope being the Republicans. So the people whose tax deductions Obama is threatening are not Republican fat cats, but Democrat fat cats, who would feel mightily betrayed if the people they just helped put in office turned around and pulled some of their tax breaks.
And as to the question, doesn't Obama know this? -- he probably does once it's brought to his attention. But after just a few weeks in office, he still has a bit of that aura of idealism. He was brought up to think that "rich" = bad and "poor" = good. But the aura is fading fast, and his worldly-wise and cynical Democratic colleagues are hastening the process in any way they can.