Taxation: Going the way of the frog

Drop a frog in boiling water, he will jump right out; put him in tepid
water and slowly add the boiling water and he will fall asleep, cooked to
destruction.

Such could be the fate of Indian tribal sovereignty, if leaders let
themselves be conditioned into a stupor when the spirited defense of their
rights is paramount. It is not easy to sustain a firm and principled stance
in facing off with the power of a state governor, or, harder still, the
federal government.

While Congress cuts taxes nationally, mostly benefiting very high-income
Americans and corporations, much of whatever needs to be done by government
and social services continues to get done and someone has to pay for it.
States and counties are feeling the pinch, property taxes are going up and
up and suddenly the late good fortune of tribes, just in the cusp of
gaining sustainable economies, becomes the target of plunder.

The sovereign status of Indian tribes in the United States represents
inherent rights that predate the founding of the American republic. This is
fact. The assertion of those rights by tribes has resounded with varying
degrees of success in every decade of every century since then.

American Indian nations in their own territories, on their titled tribal
lands or in trust status lands, have long been considered part of Indian
country, that piece of the American landscape still under the control of
governments with a sovereign status on a par – at the very least – with
states within the federal umbrella.

As we all know, the late good fortune of tribes to launch and protect from
taxation and undue regulation their own tribal enterprises is in the
crosshairs of way too many governors as states seek to make up for huge
state deficits caused by their own mismanagement and the downturn in
federal dollars. The call for Indian tribal enterprises and businesses
operated by individual tribal members thus becomes to pay “their fair
share” of “taxes” to the coffers of their respective states.

This is the coming showdown in New York state, particularly over oil and
tobacco products. Gov. George Pataki, after years of upholding his word to
“respect” Indian sovereignty, has now moved to “obey the law” and is
gearing up to crack down on Indian resistance to state taxation.
Unrelentingly, the association of convenience store operators, along with
state accountants, have been able to convince state elected officials that
somehow the state was “losing” upwards of $300 million each year to this
“non-payment” of taxes.

Any way you cut it, the definition is deceptive. By what formula must the
tribes share a piece of their protected revenues without giving away their
rightful ownership and legal protection as sovereign nations within their
own jurisdictions? How can the state be “losing” something it does not own
in the first place, namely, the tax base of another sovereign government?

It is a moment of truth in the question of taxation of Indian tribal and
private reservation businesses. It is a major question of sovereignty, and
tribe by tribe all have tested the waters of shifting definitions and terms
to describe the bite that states seek always to take out of the fruits of
Indian existence.

Taxation of Indian enterprises by the states cuts to the quick of the whole
definition of sovereignty. Tribal people with strong governments and a
cultured population have resisted imposed taxation with their bodies over
barricades against the clubs and gasses of hundreds of state troopers. In
1997, two years after Governor George Pataki nearly launched an anti-Indian
military plan known as “Operation Gallant Piper,” involving the massing of
10,000 troops, against Indian reservations, New York state’s intention to
tax Indian businesses caused a near rebellion state-wide. Led by the
alliance of the two most populous tribes, the Seneca Nation of Indians and
the St. Regis Mohawk, the grassroots rebellion ended in a stalemate with
the state. For the new governor, it represented a lesson in tribal
diplomacy and he certainly deepened his understanding for the intense
opposition of the tribal base on this issue.

Eight years later, after constant lobbying by anti-tribal forces,
unenforceable court decisions and several unsatisfying attempts to settle
land claims under the carrot stick of casino giveaways in the New York
region, Governor Pataki is back to his first move – to enforce a tax scheme
that Indians throughout the past century have decried as unacceptable.

These taxes, if enforceable, represent the livelihood of hundreds of Indian
reservation families that gain employment on their own tribal tax-sovereign
territories.

Increasingly the pressure falls on Indian leaders seeking to protect tribal
rights to self-determination and self-government. Some, like the Mohawks of
Akwesasne, are in the thick of negotiating a land claim essentially linked
to the go-ahead for a casino in the Catskills region. This would be a
projected gold mine for the legendary nation of several thousand people,
and Tribal Chief James Ransom is feeling the pressure of so many chiefs
before him as the state turns up the heat on the waters toward that
eventual day when taxation is acceptable to the Mohawk tribal government.

Turning up the heat in this case means fudging the wording from “tax
collection” to “trade agreement,” intimating that the state may keep “hands
off” and/or “take into account” the tribe’s own existing regulations for
licensing and taxing businesses on Mohawk land in the north. However, in
order to qualify for a downstate casino, tribes will have to agree to
collect and remit state and local taxes on sales to “non-members of the
tribe or nation” on what will become Indian trust lands in the Catskills.

The Mohawks were told the state will “take into account” the tribes’ own
sovereign legislation governing such sales at Akwesasne. The ink was hardly
dry on that concept, as Indian Country Today Associate Editor Jim Adams has
written, when the governor broke his word and announced the writing of new
regulations to force the collection of taxes on all Indian lands within the
state of New York. Tribal and private member businesses are feeling the
same pressure at Seneca Nation, Oneida Nation and at Tuscarora and
Onondaga.

New York state Indian leaders need to get sensitive to the rising
temperature in the water. Rather than constantly cut separate deals with
the state in ways that will deaden their vitality to defend long-held
tribal rights, they should consider a summit where the issues can be
addressed. It is not too late for leadership to define their common
concerns and the fundamental principles from which none will budge.

Perhaps this is only a pipe dream for the inheritors of the great Iroquois
Confederacy in 2005, but the alternative is to swim in water that is
quickly boiling and, like the frog, we know the stupor induced by cynical
state negotiators can only lead to the destruction of Indian peoples. No
self-respecting Haudenosaunee nation would ever agree to state taxation on
any of its lands, anywhere.

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Taxation: Going the way of the frog

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