On taxes, who is scalping whom?

In Wisconsin the old scalping routine came to the forefront. There, after the signing of a new gaming compact by the Democratic governor, the state GOP posted a cartoon depicting a tomahawk flying at a non-Native taxpayer while a voice-over declared, “As taxpayers, we got scalped.”

The GOP later withdrew the ad, but they were in fact protesting the reality that tribes have sovereign status; they were bemoaning the fact that the tribes have the right to issue their own taxes and have governmental status vis-a-vis the state and the federal government. By implication, they were saying that they were somehow “losing” something (that presumably belonged to them) when the tribes exercised their rights as sovereign political entities to not pay state taxes and to enforce tribal laws.

Of course, the cartoon is offensive in other ways. The whole notion of Indian scalping and who scalped who first has been debated ad nauseam (although we certainly know who formed Americas first societies). But there is documented proof that scalping occurred among all groups in the early contact period. This is also true: in Indian custom, to take a scalp was a mark of honor from the field of combat. For colonials, however, taking an Indian scalp meant a reward of money from local government. This equation has resonance even today.

Squeezed from the federal government and on down by huge tax cuts, a sluggish economy and expensive wars, most states in the Union are experiencing severe financial stress. Huge deficits have blossomed. This tightens down the levels, so that counties and towns in the United States are in severe economic straits.

Wisconsin, for example, expects a $3.2 billion shortfall in its next budget. California, New York state and many others are in similar situations. In California, the budget shortfall is over $34 billion dollars. New York state’s deficit is in the tens of millions.

As Indian tribes and their gaming and diversified enterprises have, in some instances, becoming significant economic forces in their regions, the focus of attention by those who have mismanaged their own financial affairs in the states has shifted to the income of those tribal entities. A dangerous (and recycled) idea has reared its wizened head: Let’s see what we can get from the Indians! Suddenly, a lot of governors are much more willing to encourage Indian tribal casinos and push for higher percentages of the tribal incomes for state coffers.

We acknowledge that crisis often breeds opportunity. Governors, whose job it is to issue balanced budgets, are, in some cases, bending backwards and sideways to negotiate gaming compacts. In other cases they are seeking to impose state taxation on goods and services provided on sovereign Indian territories. But, what are the implications of their actions? And, under what misguided assumptions to they operate?

There is one tired assumption we would address – the notion that it is the state’s money to lose when a tribal government asserts its powers and authorities to be “not taxed” by other governments as provided for in the U.S. Constitution. It is also not the state’s tax money to lose when goods and services are sold in Indian country. Additionally, given the provisions of IGRA, tribal gaming revenue must support tribal members and services, as well as meet many other criteria deemed necessary by tribal governments. State taxation, even when called by other names such as revenue sharing still pulls directly from the tribal base of capitol resources and diminishes benefits to American Indian peoples.

Let’s face it: most states and certainly the federal government share responsibility for not preparing in their gilded years of the 1990s for the potential rainy days of the future. Well, those rainy days are here. The mainstream population, at a time of war, hasn’t had much time to think about the cost to the economy, overall, and particularly for keeping its federal and state deficits in check. But the day of reckoning is beginning to be felt and the pressure is intense on local tax bases. So Indians are targeted once more to cover the state’s poor planning and the effects of the country’s very expensive, long-term foreign campaign.

Despite the many decades of war and brutal treatment, tribal Americans have learned to recover within the larger society, to hold on to tribal territories and culture and to now begin to recover our place, economically. There is no doubt that most tribes are extremely supportive of their veterans and active service men and service women. Native tribes contribute proportionately more people to the military, than any other population in the United States. We acknowledge that once the country went to war in Iraq, the best way forward has been to win and usher in, as quickly as possible a proper Iraqi government.

So it is proper to wonder why it is the tribal bases, just when their economics are beginning to improve, that are targeted again to pay for American expansion. The United States is among the richest political entities on the face of the Earth, and got that way largely by dispossessing American Indians of their lands and resources. Clearly, there is enough wealth in the United States to solve their budgetary problems. And certainly the states are mature enough to know how to get out of fiscal problems of their own creation.

We support the Native leadership voices who caution all tribes against giving away any rights at all. Remember you are rebuilding your nations out of severe dispossession and tragic aggression. You are exercising your best capacity to empower your membership, your nation and your region – in your own sovereign way, as supported by tribal and federal law.

We agree with the leaders who say to the states: don’t over-covet tribal gaming revenues. This whole new opportunity to field capital, generated by the gaming industry, is just beginning to help rebuild Indian country. Indian country suffered huge losses over several centuries. Even in the 20th century, a marvel era of industry, business, technology and accounting practice, the U.S. bureaucracy managed to misplace, lose or steal more than $3 billion in Indian royalty monies. A tribal financial base is just getting underway, as a result of the successful legal and political battles waged by Native peoples through the past three decades, culminating in the sovereign-based political and business activity we see stirring today.

At the same time we recognize that tribal America must be a good neighbor. This is good business policy and it is good human policy. But no tribe in America can afford to give away or negotiate away an essential right. The quid pro quo would have to be enormous and the circumstances very bleak to negotiate at that level. We know that it happens; just never forget that your tribal rights are your powers until you are willing to “give them up.” But once given up, they are seldom if ever recovered. It is near to impossible, before a court of law or even a court of public opinion to back yourself up on rights previously and fundamentally signed away.

The power of taxation is one of Indian country’s core issues and one of the defining features of tribal sovereignty. If a tribe pays or helps collect state taxes for income earned, or goods and services sold, on its own lands, then it has acquiesced to state hegemony. Income from taxation on Indian lands is the Indian nation’s income to lose. It does not belong to the state. Of course, a tribe should never pay municipal property or sales taxes on Indian lands. These resources are needed more and can be better applied throughout Indian country where poverty is still endemic in many regions.

Indeed, there is an increasing amount of Indian partnership and charity, in business and in up and coming tribal foundations. Tribes that are recovering economically are generally good neighbors. The tribes require the opportunity to continue to reach for economic recovery options and to also better determine how best to help each other grow and prosper. After all, history is full of the disastrous consequences of federal and state mismanagement of Indian affairs, which has largely served to deprive American Indians of their assets and keep them out of control of their own economies.

States need to look inward for the causes and the potential solutions to their economic woes, and let the tribes sort out their own level of internal and external giving, unencumbered and not compromised by the pressures of huge and ravenously hungry state budgets. America had long ago taken enough from its original peoples.