Gavin Clarkson: It’s high time to end double taxation in Indian country

Interior Secretary Deb Haaland, second from right, speaks during a meeting on tribal water issues in the Colorado River Basin in Albuquerque, New Mexico, March 28, 2022. Photo : US Department of the Interior

It is high time to end double taxation in Indian country

Thursday, April 7, 2022

By Gavin Clarkson

Here is the text of an open letter to Home Secretary Deb Haaland and Assistant Secretary of Indian Affairs Bryan Newland.

Dear Secretary Haaland and Assistant Secretary Newland, I am writing to you publicly because attempts to contact you individually have been unsuccessful. I realize that as a former Donald Trump administration official, taking my calls or answering my inquiries is a challenge in the current political climate. However, I hope we can all agree that Indian Affairs need not be too partisan, and it is in this spirit that I write to you today. In late 2016, the outgoing Barack Obama administration proposed updating Indian merchant regulations to eliminate the double taxation problem created by the United States Supreme Court in Oil Cotton. This was a question I had been researching for years, and I published a paper at the 2017 Sovereignty Symposium, American Indians Against the Billion Dollar Tax Weevil, calling for the elimination of double taxation of job creators in Indian country. The opportunity to advance this policy goal was the primary reason I accepted President Trump’s nomination as Deputy Assistant Secretary for Policy and Economic Development, and during my time in the Interior we developed a strong economic argument that not only Indian country, but the entire nation, would be better off if double taxation were eliminated for on-reserve job creators.

The problem of double taxation in Indian country

Unfortunately, swamp creatures exist on both sides of the political aisle, and state-level fiscal weevils are extremely myopic, so despite my strong objections, this whole project was shelved in late 2017. Rather than d to abandon this vitally important initiative, I resigned from the Department of the Interior and ran for Congress in New Mexico with the elimination of double taxation of job creators in Indian country as my main economic proposal. Our analysis indicated that my proposal would generate at least $2 billion for New Mexico and $40 billion nationally, all without costing federal taxpayers a single penny. Secretary Haaland also ran for Congress that same year, and when then-candidate Haaland and I appeared together at a forum hosted by the All Pueblo Board of Governors during the 2018 primary, I approached her to discuss my proposal to end double taxation. She seemed surprisingly indifferent to the proposal, but maybe she didn’t want to be seen pleasing a Republican. If so, it was unfortunate, but also in the past. When Larry Roberts was announced as Interior Chief of Staff in 2021, I was hopeful that the Indian Trader Regulation Review effort would be revived, since Larry was the Acting Assistant Secretary when this initiative was presented for the first time. However, for those of us on the outside, it seems nothing has happened. Even more troubling, apparently some people at Interior are afraid to contact me directly about this project despite my personal cell phone and email. Instead, they contacted friends of mine asking where the information was.

Gavin Clarkson

Gavin Clarkson is seen in Washington, DC in February 2018. Photo by Indianz.Com (CC BY-NC-SA 4.0)
Rather than playing the phone game in the schoolyard, I published an article in this month’s edition federal attorney which serves it all on a silver (and turquoise) platter. All Interior data is referenced by URLs, just like the work document which I developed with our chief economist, Dr. Steve Payson. Dr. Payson has separately published a generalized version of our model, to which my article also refers. My federal attorney The article therefore contains everything the Interior needs to justify revising the regulation of Indian traders and eliminating the double taxation of job creators in Indian country. The data and model are now publicly available, and the model has been published in a peer-reviewed economic journal, so anyone can now repeat our analysis and reproduce our results. Since this initiative was launched under Obama and hit the goal line under Trump, its bipartisan good faith is evident. The National Congress of American Indians, the United Tribes of the South and East, NAFOA and National Tribal Tax Alliance all support my proposal, as do most tribal leaders who have weighed in on the issue. Even Grover Norquist of Americans for Tax Reform endorsed my proposal. All it takes is someone in the Biden administration to push him over the goal line. Yes, I’m a Republican, and yes, I think the vast majority of Joe Biden’s presidency has been an absolute disaster. But I would gladly let this administration take credit for finally solving the problem of double taxation. The economic health of Indian country is far more important than scoring partisan points. Please don’t let the fact that someone in the Trump administration did all the heavy lifting on this initiative deter the Biden administration from actually doing anything on double taxation. I will be at Federal Bar Association Indian Law Conference this week, and I am happy to discuss this matter with the Interior people who will be present.

Dr Gavin Clarkson, Esq., Served as Deputy Under Secretary for Policy and Economic Development – ​​Indian Affairs at the Home Office in 2017.

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