Washington Update: Tax Reform
Mark Trahant: Indian Country goes ignored as Republicans focus on tax reform: Oct 3, 2017
Indians don’t pay taxes?
Or why the coming tax debate matters so damn much
By Mark Trahant
Trahant Reports
TrahantReports.ComThe Senate has given up on destroying Medicaid and much of the health care system and is now focused on restructuring the federal tax system (and destroying entitlement programs in the process).Here is what Speaker Paul Ryan said Sunday on CBS’ Face the Nation: “We’re going to double that standard deduction. We’re going to make it so he can fill out his taxes on a postcard. We’re going to lower his taxes. That’s really important. So he has more tax-home pay. But there’s another component to this is, look at this machine shop, this business pays about a 40 percent tax rate but it competes with companies all around the world who pay an average 22 and a half percent on their taxes.”The GOP Framework begins with this set of principles: “President Trump has laid out four principles for tax reform: First, make the tax code simple, fair and easy to understand. Second, give American workers a pay raise by allowing them to keep more of their hard-earned paychecks. Third, make America the jobs magnet of the world by leveling the playing field for American businesses and workers. Finally, bring back trillions of dollars that are currently kept off-shore to reinvest in the American economy.”So how does Indian Country fit into that framework? Indians don’t pay taxes, remember? Actually if you Google that phrase it returns 2.17 million hits. It’s still a myth that will not fade away. But the larger issue of tax reform and its impact on Indian Country is still a complicated question, one that starts with the definition of “taxes.”Most so-called middle-income wage earners pay income taxes. Roughly one-third of all wage earners do not pay income taxes — and that would include a lot of tribal citizens, especially those living in their tribal nations. There are nearly 150 million tax returns filed every year and 36 million end up paying no tax at all. Another 16 million had taxable income but didn’t pay anything because of tax credits, deductions and other adjustments.And, many of Indian Country’s working class especially benefit from one such credit, the Earned Income Tax Credit. This is a hugely successful policy that returns cash money to some 7 million family incomes; a paid bonus of sorts for working.“Numerous studies show that working-family tax credits boost work effort,” according to The Center for Budget and Policy Priorities. “The EITC expansions of the 1990s contributed as much to the subsequent increases in work among single mothers and female heads of households as the welfare changes of that period, extensive research has found. Women who benefited from those EITC expansions also experienced higher wage growth in subsequent years than otherwise-similar women who didn’t benefit. And, by boosting the employment and earnings of working-age women, the EITC boosts the size of the Social Security retirement benefits they ultimately will receive.”In addition, the research shows that by boosting the employment of single mothers, the EITC reduces the number of female-headed households receiving cash welfare assistance,” according to the center.So far, at least, there is no plan to end the Earned Income Tax Credit. However the House Budget Committee has proposed that the IRS require more proof from taxpayers and audit homes with an error. (Auditing the poor seems a long way from the Willie Horton philosophy of tax collection, or bank robbing, and that’s the idea you go where the money is.)Read full article:
Washington Update: Oct. 2017
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This has been a hard week on Congress and the rest of the Country struggling to grasp the magnitude of the mass shooting in Las Vegas, Sunday night, and the motivation of the killer. Debate, shifted from the GOP tax reform package release last week, to gun control legislation. Representative Carlos Curbelo (R-Fla) is looking at introducing a legislative package to ban Bump Stocks, a tool to convert semi-automatic weapons to fully automatic. Speaker Ryan, has spoken this week on the issue, and implies the party is looking also at a regulatory rather than legislative fix to the use of Bump Stocks. The fact either path, is being debated by the GOP is a departure from past positions on gun control, but reflects that the shooting in Las Vegas has a big impact on country and what can be done to prevent future misuse of illegal weapons.
Meanwhile, the GOP is pushing tax reform, and the advantages to both large businesses and individuals. After, the failure to pass health care reform, to free up revenue for Tax Reform, now the debate is on whether Tax Reform will increase the deficit by reducing tax rates. If Republicans do aim for a deficit-neutral plan, it would make it much more difficult to advance a package that relies on the theory that short-term deficits can lead to long-term economic growth.
Instead, the GOP would be forced to find ways to pay for the tax cuts, inevitably creating a “winners and losers” situation in which some income brackets would see a reduction in their taxes, while others may see an increase. Removing the state and local tax deduction, for example, has become a huge point of debate within the party because some states, like Pennsylvania and New York, might be more adversely impacted than others where the state and local taxes are not as high.
For this update, we will report on the tax reform plan, where the budget stands, and how Indian country may be impacted.
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Happy New Year 2016
We want to wish everyone a very happy and prosperous new year, and hope to see you again in 2016 at conferences or here in Washington. The Congress has been very busy at the end of this year and proud of the fact it accomplished the passage of major highway and education bills that had lingered on the congressional agenda for months, and also approved a tax break and spending package, avoiding a government shutdown. Appears that Congress is working again. As Speaker Ryan recently was quoted. “We passed more major legislation in a few weeks than we have in a few years.” See my other recent blog post for details of the recent legislation that broke the congressional deadlock. 
WASHINGTON LEGISLATIVE UPDATE: OMNIBUS SPENDING BILL, TAX EXTENDERS, INTERIOR IMPROVEMENT ACT
Congress Passes $1.8 Trillion Spending Measure- For the Indian Health Service (IHS), the omnibus provides a total appropriation of $4.8 billion, a 3.6% increase over FY 2015 levels. This includes flat funding at $914 million for Purchased/Referred Care (formerly Contract Health Services) and $523 for Facilities, a $63 million increase. It also provides an additional $10 million to alcohol and substance abuse for a focus on Tribal youth, and an increase of $12.9 million for staffing.
- The Bureau of Indian Affairs (BIA) is funded at a total of $2.8 billion, a 7.5% increase over FY 2015 enacted. This includes $2.26 billion for the Operation of Indian Programs, a $161 million reduction compared to FY 2015, as well as $852 million for the Bureau of Indian Education. Notably, the bill also contains $138 million for school construction, an increase of $63.7 million, which should complete the 2004 replacement school construction list.
- For Contract Support Costs (CSC) at both BIA and IHS, the omnibus creates an indefinite appropriation using the language, “such sums as may be necessary,” rather than specific amounts. Tribes and Tribal organizations advocated for the CSC line item to be made mandatory on a permanent, indefinite basis in order to stabilize funding, protect funding appropriated to other line items, and help to avoid funding shortfalls. Though the omnibus does not make CSC mandatory, providing for an indefinite appropriation will allow the agencies to pay CSC in full, as required by the Supreme Court decision in Salazar v. Ramah Navajo Chapter, as well as protect other line items in the budget and avoid shortfalls.
- In addition to the omnibus, Congress also passed a $680 million package to extend a number of critical tax provisions that have been expired since the end of 2014. Each of these tax credits is designed to encourage increased investment in projects within Indian Country, as well as increased jobs for Native people and indicate that greater tax reform is around the corner. These include:
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the Interior Improvement Act
NEW HIGHWAY BILL BREAKS THE DEADLOCK
After contentious negotiations the Congress passed a 5 year fully funded Transportation Bill, boosting spending on roads and transit systems by billions each year. The “FAST ACT” is an over $305 billion bill. It increases spending on highways by 2.1 $billion the first year above current levels. By the final year 2020 the bump is $6.1 billion above the $50 billion in recent years.- Should money be found through user taxes like the gas tax or by taxing the number of miles driven?
- Can long term funding be found by bringing home billions of dollars in taxable income that corporations have stashed off shore?
- Should there be a turn away from a transportation only funding source such as a gas tax and instead toward using income and other taxes?
- Should money to pay for transit systems come from revenue collected mostly from drivers who pay taxes? Should tax collected from the same fee user fees be spent on bike and pedestrian needs?
- Tribal Transportation Program funding is increased each year.
- $465 million in FY 2016 and $10 million per year increases to $505 million in FY 2020 (Sec. 1101(a)(3).
- The USDOT tribal self-governance program is a new provision (Sec. 1121), there will be a negotiated rule-making for this new program.
- The Tribal Transit program is increased from $30 million to $35 million per year (with $30 million for the formula component of the Tribal Transit Program and $5 million for the discretionary competitive transit grant program under section 5311(c)(1) of title 49 (Sec. 3007(a)(1)(A) and (B) and 3016).
- A new $100 million per year grant program is established for “nationally significant” Federal Lands and tribal transportation projects (Sec. 1123).
- The Project Management and Oversight (PM&O) “takedown” for the BIA and FHWA is reduced from 6% to 5% (Sec. 1118).
- The Tribal Transportation Bridge Program takedown is increased from 2% to 3% (Sec. 1118).
- Provides tribal data collection reporting regarding the expenditure of Tribal Transportation Program funds under Section 202 of title 23 to the Secretary of the Interior (Sec. 1117(a)).
- Directs the Secretary of the Department of Transportation to report to Congress, after consulting with the Secretary of the Interior, the Secretary of DHHS, the Attorney General and Indian tribes, describing the quality of transportation safety data collected by States, counties, and tribes for transportation safety systems to improve the collection and sharing of data regarding crashes on Indian reservations (Sec. 1117(b)).
- Requires the Secretary of Transportation, after consultation with the Secretary of the Interior, the AG, States and Indian tribes, to provide a report to Congress within two years of enactment of the FAST Act that identifies and evaluates options to improve safety on public roads on Indian reservations (Sec. 1117(c)).
Federal Court Rules Against Redskins In Legal Battle With Native Americans
JULY 08, 201510:23 AM ET
A federal court has ruled against Washington, D.C.’s, professional football team in a legal battle with Native Americans over the team’s name.
United States District Judge Gerald Bruce Lee ruled that the U.S. Patent and Trademark Office should cancel the team’s trademark of the Redskins name because the name “may disparage” native Americans.
This order does not go into effect until the team has exhausted its appeals. The next step for the team would be the United States Supreme Court.
But as Judge Lee points out, even if the judicial system ultimately sides with the group of Native Americans fighting this in court, the team could still continue to use its name. The decision would mean that the team would no longer be protected by federal trademark protections, which means the team would have a harder time stopping independent sellers from using its logo on jerseys, for example.
As the Washington Post reports, the team has argued that canceling its trademark “would taint its brand and remove legal benefits that would protect against copycat entrepreneurs.”
In Lee’s opinion for the U.S. Court for the Eastern District of Virginia, he ruled against the team and agreed with a previous ruling from the federal Trademark Trial and Appeal Board.
Lee wrote: “The Court finds that Blackhorse Defendants have shown by a preponderance of the evidence that there is no genuine issue of material fact as to the ‘may disparage’ claim: the record evidence shows that the term ‘redskin,’ in the context of Native Americans and during the relevant time period, was offensive and one that ‘may disparage’ a substantial composite of Native Americans, ‘no matter what the goods or services with which the mark is used.’ … ‘Redskin’ certainly retains this meaning when used in connection with PFI’s football team; a team that has alwaysassociated itself with Native American imagery, with nothing being more emblematic of this association than the use of a Native American profile on the helmets of each member of the football team.”
Senate Committee on Environment and Public Works asks for more Money for the Tribal Transportation Program
In a markup hearing this morning, the EPW unanimously approved the “Developing a Reliable and Innovative Vision for the Economy Act” (“DRIVE”). The bill proposes a six-year plan to address the transportation funding crisis and associated infrastructure shortfalls. Chairman Inhofe stated that the progression of the bill hinges on the elimination of red tape and redundancies that prevent large scale projects from being realized in a timely manner.
Although not discussed during today’s proceedings, the Act as it is currently written includes adjustments to the Tribal Transportation Program which would allocate more money for transportation projects on tribal land. The adjustments would set aside $460,000,000 for the 2016 fiscal year and would increase by $10,000,000 each consecutive FY up to $510,000,000 by 2021. The DRIVE Act also creates a “Nationally Significant Federal Lands and Tribal Projects Program” which would set aside funding for construction or maintenance projects sponsored by eligible Federal land management agencies or Indian tribes. Other amendments to Title 23 include a provision making tribal transportation facilities projects eligible for emergency assistance; also, the administrative expenses are expected to be cut from 6 percent to 5 percent while increasing the potential amount set aside for tribal transportation facilities bridges from 2 percent to 3 percent for each FY.
With just under forty days until the current highway program extension expires, the committee stressed the importance of continued bipartisan cooperation to ensure the creation of viable sources of revenue for the Act.
Click to view the hearing Webcast
Below are excerpts from the DRIVE Act that impact Tribal transportation funds. The excerpts may be truncated.
Title I—Federal-Aid Highways
Subtitle A—Authorizations and Programs
Sec. 1001. Tribal Transportation Program.—
For the tribal transportation program under section 202 of title 23, United States Code—
(a)(3)(A)
- $470,000,000 for fiscal year 2017;
- $480,000,000 for fiscal year 2018;
- $490,000,000 for fiscal year 2019;
- $500,000,000 for fiscal year 2020; and
- $510,000,000 for fiscal year 2021.
Sec. 1022. Emergency Relief for Federally Owned Roads.
- —Section 125(d)(3) of title 23, United States Code, is amended—
- in subparagraph (A), by striking “or” at the end;
- in subparagraph (B), by striking the period at the end and inserting “; or”; and
- by adding at the end of the following:
“(C) projects eligible for assistance under this section located on tribal transportation facilities, Federal lands transportation facilities, or other federally owned roads that are open to public travel (as defined in subsection (e)(1)).”.
Sec. 1026. Tribal Transportation Program Amendment.
Section 202 of title 23, United States Code, is amended—
- in section (a)(6), by striking “6 percent” and inserting “5 percent”; and
- in subsection (d)(2), in the matter preceding subparagraph (A) by striking “2 percent” and inserting “3 percent”.
Sec. 1027. Nationally Significant Federal Lands and Tribal Projects Program.
- —The Secretary shall establish a nationally significant Federal lands and tribal projects program (referred to in this section as the “program”) to provide funding to construct, reconstruct, or rehabilitate nationally significant Federal lands and tribal transportation projects.
- Eligible Applicants.—
- In General.—Except as provided in paragraph (2), entities eligible to receive funds under sections 201, 202, 203, and 204 of title 23, United States Code, may apply for funding under the program.
- Special Rule.—A State, county, or unit of local government may only apply for funding under the program if sponsored by an eligible Federal land management agency or Indian tribe.
- Eligible Projects.—An eligible project under the program shall be a single continuous project—
- on a Federal lands transportation facility, a Federal lands access transportation facility, or a Tribal transportation facility (as those terms are defined in section 101 of title 23, United States Code), except that such facility is not required to be included on an inventory described in sections 202 or 203 of title 23, United States Code;
- for which completion of activities required under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) has been demonstrated through—
- a record of decision with respect to the project;
- a finding that the project has no significant impact; or
- a determination that the project is categorically excluded; and
- having an estimated cost, based on the results of preliminary engineering, equal to or exceeding $25,000,000, with priority consideration given to projects with an estimated cost equal to or exceeding $50,000,000.
- Eligible Activities.—
- In General—Subject to paragraph (2), an eligible applicant receiving funds under the program may only use the funds for construction, reconstruction, and rehabilitation activities.
- Applications
- Selection Criteria.—In selecting a project to receive funds under the program, the Secretary shall consider the extent to which the project—
- furthers the goals of the Department, including state of good repair, environmental sustainability, economic competitiveness, quality of life, and safety;
- improves the condition of critical multimodal transportation facilities;
- needs construction, reconstruction, or rehabilitation;
- is included in or eligible for inclusion in the National Register of Historic Places;
- enhances environmental ecosystems;
- uses new technologies and innovations that enhance the efficiency of the project;
- is supported by funds, other than the funds received under the program, to construct, maintain, and operate the facility;
- spans 2 or more States; and
- serves land owned by multiple Federal agencies or Indian tribes.
Subtitle B—Data
Sec. 2101. Tribal Data Collection.
Section 201(c)(6) of title 23, United States Code, is amended by adding at the end the following:
“(C) Tribal Data Collection.—In addition to the data to be collected under subparagraph (A), not later than 90 days after the end of each fiscal year, any entity carrying out a project under the tribal transportation program under section 202 shall submit to the Secretary and the Secretary of the Interior, based on obligations and expenditures under the tribal transportation program during the preceding fiscal year, the following data:
“(i) The names of projects or activities carried out by the entity under the tribal transportation program during the preceding fiscal year.
“(ii) A description of the projects or activities identified under clause (i).
“(iii) The current status of the projects or activities identified under clause (i).
“(iv) An estimate of the number of jobs created and the number of jobs retained by the projects or activities identified under clause (i).”.
Title VI—Extension of Federal-Aid Highway Programs
Sec. 6001. Extension of Federal-Aid Highway Programs.
(c) Tribal High Priority Projects Program.–
Section 1123(h)(1) of MAP-21 (23 U.S.C. 202 note; Public Law 112-141) is amended—
- by striking “$24,986,301” and inserting “$30,000,000”; and
by striking “July 31, 2015” and inserting “September 30, 2015″.
Victory for Big Lagoon Rancheria: Restoring Certainty for Challenging Lands into Trust after 1934
The Big Lagoon Rancheria had a major victory this month after an en banc decision granted Big Lagoon the authority to pursue the construction of a casino on tribal land in trust. In 1994, the United States accepted into trust an 11-acre parcel of land on which the Tribe sought to build a casino. The Indian Gaming Regulation Act (IGRA) allows tribes to operate class III gaming only after entering into a tribal gaming compact with the state. When negotiations stalled, Big Lagoon brought suit against California, and in 2007 the district court ordered the parties to come to an agreement after finding that the state had not negotiated in good faith.
California appealed, and pursuant to the Supreme Court’s decision in Carcieri (2009), the Ninth Circuit found that because Big Lagoon was not federally recognized in 1934, the Bureau of Indian Affairs (BIA) lacked authority under the Indian Reorganization Act (IRA) to accept land into trust for Big Lagoon. The three-judge panel concluded that since the 11-acre parcel was not tribal land, Big Lagoon lacked standing to compel California to negotiate.
However, the Ninth Circuit’s recent en banc panel vacated the previous decision and reinstated the district court’s holding that state violated IGRA by failing to negotiate in good faith. If California had wanted to contest the original acceptance of the parcel, the state would have had to do so under the Administrative Procedure Act within the six-year statute of limitations. The en banc panel’s ruling helps restore some certainty to tribes recognized after 1934 by preventing collateral attacks on tribal land in trust beyond the statute of limitations.
Native Law Policy 