An Economic Analysis of the Effects of State Taxes on Infrastructure Development and Economic Growth in Tribal Nations

Abstract

When states wrongly insist on taxing on-reservation resources and economic activity, they dramatically increase the overall cost of any project. In some arenas, double taxation makes otherwise economically viable projects impossible to pursue. The impact is particularly acute for tribes that are trying to grow their economies by attracting outside capital and non-Indian businesses to the reservation.

Fortunately, however, federal preemption provides a mechanism to eradicate these pernicious tax weevils yet again. A careful revision of the Indian Trader regulations would provide a mechanism to reverse this judicially-imposed disaster of double taxation while simultaneously excluding overzealous state regulators. This article analyzes the empirical evidence submitted to the office of the Deputy Assistant Secretary for Policy and Economic Development -- Indian Affairs and presents an economic model demonstrating a multi-billion dollar positive impact on both tribal and state economies when double taxation is eliminated.