Baucus Hearing Statement Regarding Indian Tax Issues

Hearing Statement of Senator Max Baucus (D-Mont.)
Regarding Indian Tax Issues

The Teton Sioux Lone Man once said: “I have seen that in any great undertaking, it is not
enough for a man to depend simply upon himself.”

He was right. In economic policy, as in any great undertaking, we need to work together.
And for American Indians, that can mean working with family, working with the Tribe,
and working with the United States.

Times are tough in Indian Country. Even before the current economic downturn, the
Census Bureau reported that a third of American Indians or Alaskan Natives who were
available for work were unemployed.

The median American Indian or Alaska Native household earns $15,000 less than the
median U.S. household.

And more that one in four American Indians and Alaska Natives lives in poverty. At
more than 26 percent, that’s the highest poverty rate of any American ethnic category.
Economic development in Indian Country requires a great undertaking. We need to work
together. Families, Tribes, and the Federal Government each need to play a part.

Indian Nations often suffer from high unemployment rates because there are no
businesses on or near the reservation. There’s often simply nowhere to go to find a job.

Indian reservations in our country often suffer from economies and conditions that one
might expect to find in the developing world. Many reservations are in rural areas where
transportation, infrastructure, and communications are minimal at best.

Today, we will hear about three strategies for economic development in Indian Country.
We will discuss tax-exempt bonds. We will discuss accelerated depreciation. And we
will discuss the Indian Employment Tax Credit. These will not solve all of our problems,
but they will help.

All three of these tax policies affect tribal entities and reservations. Today we will
discuss the effect that these tools are having on the economic development of the tribes
and reservations. And we will discuss how we might make them work better.

We will hear from two witnesses who work as legal counsels on two different
reservations. And we will hear from a member of the oldest Indian organization in the
United States, the National Congress of American Indians.

These days, many tribes are focusing on energy issues. Some tribes hope that revenues
from energy production may give them the ability to provide needed services for their
tribal members.

Tribes are working to find new revenue sources even though laws and treaties often make
these services the responsibility of the Federal Government. All too often, the Federal
Government is failing to provide the services that it is obliged to provide.

My own tribes in Montana tell me that if they can raise the needed capital, they can
expand energy resource development, and reduce their reliance on the Federal
Government. They tell me that with tax initiatives of the sort that we discuss today, they
can provide medical care and housing for their populations.

In this regard, the tribes in Montana are not alone. Energy resources mean that many
tribes live on the edge of great potential wealth. If they can get the needed capital to
explore and develop their opportunities, many tribes hope to tap that wealth. They hope
to benefit their people.

And many tribes may benefit from the economic development that tax-exempt bonds,
accelerated depreciation, and the Indian Employment Tax Credit can help to provide.
Issuing tax-exempt bonds is a viable way for tribes to raise the needed capital to build
much-needed infrastructure, like roads and bridges.

And accelerated depreciation and the Indian Employment Tax Credit are mechanisms
that can encourage non-Indian businesses to locate on or near reservations. These tools
can help provide much-needed jobs for areas with the highest unemployment rates. And
these tools can also help companies to find lucrative business opportunities in the
process.

Today, we will examine how tribes are able to utilize these tools to promote jobs, build
infrastructure, and enhance the quality of life for the first citizens of this country.

I suspect that these tools have not yet provided all the benefit that they might. If that’s
true, I will want to hear why. And I will want to hear what we can do to help.

So let us get to work on the great undertaking of economic development in Indian
Country. Let us find new ways to work together. And let us find ways to improve life
for Native American families, for the Tribes, and for the Country of which we are all
part.

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