Sen. Udall Raises Concerns about Effects of GOP Tax Reform on Indian Country

Vice Chair of the U.S. Senate Committee on Indian Affairs Tom Udall – D – New Mexico

Published November 2, 2017

WASHINGTON —  On Wednesday, before the Senatve Committee on Indian Affairs,  U.S. Senator Tom Udall, vice chairman of the Committee, voiced his deep concerns about the impact of the Republican tax proposal on Indian Country and expressed alarm about Republicans’ apparent attempt to fast-track the bill through Congress without consulting Tribes, even though the legislation could reshape the entire economy, including Tribal communities. 
 
“While we are still waiting on details, what we know about the Republican tax plan shows little promise for Native communities. The Republican budget calls for $5 trillion in cuts over 10 years to pay for their tax breaks. But the majority is not sharing where those spending cuts will come from,” Udall said during the committee’s hearing on “Building Tribal economies: Modernizing tax policies that work for Indian Country.”
 
“Medicaid and Medicare are prime targets – and those programs provide a lifeline for many in Indian Country,” Udall said. “The majority’s plan could very well force big cuts to the Indian Health Service and the Bureau of Indian Education. These important agencies are already severely underfunded. The United States has a trust obligation to provide health and education services to Tribes. These critical programs should not be sacrificed for tax cuts to the wealthy.” 
 
“For years, Indian Country has repeatedly emphasized three principles for tax reform: parity, certainty, and consultation,” Udall continued. “Tax reform should provide broad benefits across society – not focus on giving massive tax breaks to the top 1 percent. And it should go through regular order – not this fast-track, back-door process. I am particularly disappointed that the administration could not bother to send a witness for this hearing to discuss its signature issue of tax reform.”
 
Udall’s full remarks as prepared for delivery are below. 
 
Thank you, Chairman Hoeven, for holding today’s hearing on tax reform in Indian Country. It is timely. We expect House Republicans to release their tax legislation tomorrow, but without any consultation with Indian Country.  
 
While we are still waiting on details, what we know about the Republican tax plan shows little promise for Native communities.
 
The Republican budget calls for $5 trillion in cuts over 10 years to pay for their tax breaks. But the majority is not sharing where those spending cuts will come from.  
 
Medicaid and Medicare are prime targets – and those programs provide a lifeline for many in Indian Country.  
 
The majority’s plan could very well force big cuts to the Indian Health Service and the Bureau of Indian Education. These important agencies are already severely underfunded.
 
The United States has a trust obligation to provide health and education services to Tribes. These critical programs should not be sacrificed for tax cuts to the wealthy. 
 
Many Tribes have a saying that the decisions we make today should consider the impacts for seven generations to come — a very wise saying.
 
With this tax cut bill, the majority is failing to take into account Indian Country’s views on issues of national importance.  
 
Today’s hearing provides the committee with an opportunity to hear tribal voices about what tax reform should look like.  And I think this is a good step.  
 
I hope we can work together on real—bipartisan—tax reform for our nation that includes Indian Country. 
 
For years, Indian Country has repeatedly emphasized three principles for tax reform: parity, certainty, and consultation. 
 
With regard to parity, Tribal governments and state and local governments are similar in many ways: They provide their communities with access to medical care and education, fund law enforcement agencies, and provide for the general welfare. 
 
Yet, when it comes to taxes, Tribes are treated differently. 
• Tribes can’t access tax exempt bonds in the same way states and localities are allowed.
• Unlike states, Tribes can’t garnish federal tax returns of parents who owe child support.
• And families of Native American special needs children may not be eligible for the same tax benefits received by other families with non-native special needs children. 
 
These are just a few examples of the inequitable treatment of Tribes in the tax code. And we can go on and on with many other examples.
 
This unequal treatment between Tribes and states does more than just stifle economic growth in Indian Country and hurt Native American families. It diminishes the very core of tribal sovereignty, and the exercise of self-governance. 
 
The second principle is certainty. Taxation of business in Indian Country is complex and, at times, unpredictable. 
 
Part of the complication is state taxation of activities on Tribal lands.  This prevents Tribes from raising their own tax revenue and reinvesting in their own communities. It undermines Tribal authority, strains budgets, and diverts valuable resources away from Tribal communities.
 
In years past, Congress provided businesses located in Indian Country with short term tax credits for capital investments and for employing Indians. This helped provide some temporary relief. 
 
We need to take a hard look at how we can make tax credits permanent. This includes low-income housing tax credits, an issue my colleague Senator Cantwell has championed.
 
The third and most important principle is Tribal consultation. Tax reform should provide broad benefits across society – not focus on giving massive tax breaks to the top 1 percent. And it should go through regular order – not this fast-track, back-door process.
 
I am particularly disappointed that the administration could not bother to send a witness for this hearing to discuss its signature issue of tax reform. 
 
With that, Mr. Chairman, thank you so much for calling today’s hearing that provides an opportunity to discussion how tax reform can work for all of Indian Country. 

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