In Pursuit of Tribal Economic Development as a Substitute for Reservation Tax Revenue

50 Pages Posted: 12 Nov 2004 Last revised: 26 Jan 2016

See all articles by Matthew L. M. Fletcher

Matthew L. M. Fletcher

Michigan State University - College of Law

Date Written: 2004

Abstract

This article discusses the lack of a reservation tax base upon which tribes can use to fund government services. Federal, state, and local governments have a tax base upon which to draw but federal Indian law has developed in such a manner to substantially eliminate a tax base for Indian tribal governments. The tribes' only option is to raise revenue in other ways, particularly economic development. But there are significant difficulties with establishing a predictable revenue stream through tribally owned businesses. First, tribal governments must overcome structural hurdles to financing that non-Indian local governments do not have to face. Second, non-Indian business owners object to tribal government's so-called ability to market their tax exemptions. Third, there is underway a significant backlash against Indian gaming. Fourth, tribal governments are not for-profit corporations and may be restricted in their abilities to cut unprofitable businesses and otherwise operate profitable businesses. Fifth, there are fundamental philosophical, legal, and political problems for tribal governments operating businesses on the reservation. While there are possible remedies for this situation, such as the so-called "Hicks fix," a more plausible solution would involve relatively minor changes to the Tribal Tax Status Act or a minor change in the way courts view tribal businesses - as non-profit organizations rather than for-profit companies.

Keywords: Federal Indian Law, Community Economic Development, Tribal Law

Suggested Citation

Fletcher, Matthew L. M., In Pursuit of Tribal Economic Development as a Substitute for Reservation Tax Revenue (2004). 80 North Dakota Law Review 759 (2004). Available at SSRN: https://ssrn.com/abstract=616842

Matthew L. M. Fletcher (Contact Author)

Michigan State University - College of Law ( email )

648 N. Shaw
East Lansing, MI 48824-1300
United States

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