Negotiate with Senecas

The law and justice are on the side of Gov. David A. Paterson’s plan to start collecting state taxes on tobacco products sold by the state’s Native American nations.

That doesn’t mean the governor won’t have to be very careful in the way he follows through with that pledge.

Paterson said last week that he had been warned by his own State Police that “violence and death” could be the result of any effort to go against the Seneca and Oneida nations’ long-standing and heartfelt opposition to collecting or paying state taxes. Previous pledges to collect the taxes have been met with demonstrations and confrontations, and have resulted in state officials giving up.

Indian leaders, and more than a few New Yorkers who have not a drop of native blood, feel native enterprises ought to be exempt from state taxes due to the nations’ constitutionally recognized sovereignty and treaty rights.

But the courts have repeatedly ruled otherwise, holding that tax exemptions apply only to products sold by Native Americans to Native Americans. And Paterson’s new plan to collect the tax at the wholesale level, before the cigarettes reach tribal land, has the added advantage of avoiding any need to collect taxes on, or stage an invasion of, Native American land. The plan, in fact, would allow tax-free sales of cigarettes actually manufactured on Seneca land—although “exporting” those cigarettes off native lands by non- Native American buyers would remain a disputed point.

Still, there remains the threat that the Native Americans will repeat past expressions of displeasure such as blocking the New York Thruway as it passes through their reservations. That is why Paterson’s certainty that he is right needs to be leavened with the understanding that being right in this case could lead to the risk of violence.

The arguments in Paterson’s corner go beyond the mere letter of the law. For one thing, the state is in deep financial trouble and must not ignore any legitimate source of income. The current state budget is precariously balanced, in part, on the expectation that $150 million will be collected from taxes previously uncollected on Indian cigarettes. Estimates as to how much revenue the state has been leaving on the table over the years by not collecting the tax range as high as$1 billion annually.

Moreover, one major reason why the state is so broke is the spiraling cost of providing health care for New Yorkers who do not work, cannot work, or do work or used to work for the state. Easy access to cheap cigarettes, a result of untaxed Indian tobacco, inflates those costs and so is something the state has a legitimate interest in discouraging.

Beyond their economic self-interest, the defenders of the Indian tax exemption are motived largely by emotion and pride. And those are powerful factors that can drive people to desperate action, even if they are clearly wrong on the law or on the ethics of marketing an addictive carcinogen.

If the governor can keep a cool head—ignore the intemperate advice from New York City Mayor Michael Bloomberg to“put on his cowboy hat” and stand up to the Indians —he might be able to work something out.

And, like it or not, the Senecas are not only within but part of a larger community. Paterson might gently remind the native leaders that, despite their protestations of independence, their tribal members are not so divorced from New York State. They do, after all, avail themselves of everything from education and welfare to police protection and access to public infrastructure that are funded by, yes, state taxes.

The fairness the Native nations seeks should reflect that fact.

source: buffalonews.com

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