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State taxation of casino revenues at issue

NEW YORK - Via a recent poll, the Wall Street Journal "discovered" that 57 percent of its readers believe that revenue from Indian casinos is fair game for state tax collectors.

Results of the poll, which ended on Oct. 16, show that of 3,110 respondents, 1,758 (57 percent) voted "yes" while 1,352 (43 percent) voted "no" in answer to the question "Should states be able to tax revenue from casinos on Indian reservations?"

"This poll isn't a scientific sampling of reader opinion," the Journal disclaims. "But it is a handy snapshot of what your fellow readers are thinking."

Due in large to the Journal's less-than-accurate reporting on Indian gaming, most if its readers are not likely America's best informed regarding that industry. Yet many of the comments posted by respondents belie support for Indian tribes; others are interesting in that they reveal an astonishing ignorance of both history and the reasons for the existence of Indian casinos.

"The bottom line is that we made a political arrangement through treaty with these aboriginal peoples," responded Ken Clement "We have gone back on our word in the past and this behavior has to stop at once and for all. Abrogating a treaty with another independent country for whatever reason is one thing; going back on our word with peoples of our own country is quite something else." Clement further advocated open negotiations between all parties to solve tax disputes, advice often proffered in this publication.

"We signed treaties with the Indians that exempt them from tax," said Richard David. "It's wrong to violate a contract just because it's to your advantage to do so."

Hason L. Johnson of Palm Springs, Calif. raises an important truth, albeit indirectly - that Indian gaming was never and is not now meant to be a revenue stream for state governments. "I think state governments need to maximize its revenues and minimize the expenditures. I don't think gaming revenue will bail out a state that can't manage its own affairs," he said.

Expanding on this point, Jeremiah M. Murphy wrote: "States should not be allowed to tax tribes nor should tribes be allowed to tax states. Each is sovereign. Neither is, nor should be, subservient to the other. California should not be given the authority to tax a tribe's gambling earnings any more than a tribe should have the right to tax the earnings of the California lottery. If states want to compete with tribes for gambling dollars they have that right. There's no reason they should be given the power to take the money by force of law."

In response to an assertion that the now "self sufficient" natives ought to be kicked off welfare "immediately" and forced to "get busy" providing for themselves, Nicole Homer, Oneida, of Ontario, Canada pointed out that only a fraction of the recognized tribes have gaming operations. She suggested that tax advocates might "visit numerous reservations. See the destitution of a non-gaming tribe. Then you can formulate an educated opinion on the topic."

Some other respondents conveyed a rather unaccommodating stance.

"Throughout history people have fought over land, and guess who gets to keep that land. That's right, whoever won the 'war.' Right or wrong that's the way it is," wrote Jose Lopez.

"I think Indians should all be treated like the rest of us," opined Don Winter of Camano Island, Wash. "We all should all belong to one country period."

David Storhaug listed four reasons why states should tax Indian gaming revenues, all of which are incorrect or irrelevant. One, "the gaming franchise is granted to them by the state; i.e. a privilege granted to the reservations by the state not an entitlement." (Wrong - the federal government granted legal gaming authority through the Indian Gaming Regulatory Act).

Two, "the bulk of the revenue earned by Indian casinos comes from non-reservation players." (So? That's like saying a New Yorker who buys cigarettes in Pennsylvania should pay taxes to both states. Besides, the "players" already pay taxes to the towns, counties, states and countries in which they reside.)

Three, "a significant portion of the gaming revenue is siphoned off by non-Indian gaming management and/or service companies." (Again, so what? It's a common business practice to subcontract the operation of a facility to a qualified company. Do property management companies pay special taxes?)

Four, "states need to be able to fund gambling treatment programs." (Most tribal-state compacts already call for tribes to fund such programs - others do so voluntarily.)

Three strikes and you're out

A gentleman named Don Hansen then stepped up to the plate. By admitting that he hasn't "studied the situation thoroughly," he inadvertently revealed that his only source for Indian-related news is probably the Journal itself. His first pitch: reservations have "morphed into dens of decadence with little to no connection to Indian culture" where "all they have to do is sit back and collect the checks." Strike one.

Following up, Mr. Hansen pitches these posers: "Did the Indians really have it so great before the Europeans arrived? Weren't they dieing [sic] from disease, wars with other Indian tribes, natural disasters, etc., much of which was alleviated by the advances of Western civilization?" Strike two.

Finally, the assimilation pitch: "Why not assimilate into American culture? Don't they think that they can make it here, without special rules to their benefit? Other peoples of every race and religion can get along alright [sic], outside of special enclaves. I personally would welcome them to America." Strike three - you're out.

Indian people have already welcomed your ancestors to America, Mr. Hansen. In return, they contracted the diseases you claim they were already dying from. As for the advances of Western civilization, take the advice above from Ms. Homer and visit some remote Indian reservations and see what you find.

Before you step up to the plate again Mr. Hansen, please "study the situation thoroughly." Read history books and treaties, read this newspaper and other Indian publications, attend lectures and talk to Indian people.

Read the Wall Street Journal for its excellent coverage of the economy and financial markets. Don't rely on it for news from Indian country.

The Wall Street Journal's poll is available at: http://discussions.wsj.com/n/mb/message.asp?webtag=wsjvoices&msg=2980.81.