Wednesday, September 01, 2010

Judge Scalps Tax Payers

According to our informed sources, there is a good chance that Judge Arcara will end the tax enforcement once the two week delay is finished-but in the meantime there is havoc since the judge's ruling only applies to two tribes. As the Times Union reports: "Just as state tax agents were preparing to act on the Legislature's and Gov. David Paterson's decision to collect taxes from Native American cigarette merchants, a federal court judge in Buffalo on Tuesday gave a reprieve to at least two Indian nations. Ruling in favor of the Seneca and Cayuga tribes, U.S. District Court Judge Richard Arcara temporarily blocked the state from enforcing the law until a hearing to determine if a trial is in order. The hearing on his preliminary injunction is scheduled in two weeks."

We still can't figure out the basis in law for the judge's decision-and he mercifully refrained from stating any legal reasons for the stay. After all, there simply are none. But the danger here is that this will turn into an excuse for the governor to negotiate something with the Indians that falls far short of enforcement-and we will still have a huge revenue hole in the state's budget that  needs to be filled.

So, once again, tax payers and tax paying retailers are being told to suck wind-and this has state senator Carl Kruger hopping mad: "We were looking forward to the implementation date," said Sen. Carl Kruger, D-Brooklyn, chairman of the Senate Finance Committee, a major advocate for taxing Indian cigarette sales to non-Indians. "This throws a monkey wrench in the process. What we're doing is at the rate of $1 million a day we are feeding the legal defense fund of the Native Americans as they move forward with their agenda of claiming sovereignty." He said he is upset that the same nations accept government assistance and benefits such as Medicaid."

And these bogus sovereignty claims need to be put to rest for good: "Tim Coulter, executive director of the Indian Law Resource Center, who has worked for decades with New York tribes, said: "The big picture is the law is wrong; it isn't just for one government to tax the activities of another; for instance the federal government doesn't tax the states."

Which gets us back to Senator Kruger's comments about the level of public support that the tribes are accessing-they simply can't have it both ways. And please, the Indians should keep their gross and untenable accusations-as well as their lachrymose bleatings about an inability to compete to themselves: "The governor is rushing this without telling us what the implementation will be," said Lancy Gumbs, trustee of the Shinnecock tribe. "This is just a flat-out siege of our economics, an economic genocide."

Jim Calvin of NYACS puts this into the perspective of the struggling store owners: "We're deeply disappointed," said James Calvin, president of the New York State Association of Convenience Stores. "We don't see any circumstances that would justify delaying enforcement; all these issues have been argued and reargued ad nauseam."

As the Governor Paterson told the NY Times: "The decision to impose taxes on cigarettes sold by Indians was driven in part by the state’s own financial straits. Gov. David A. Paterson said the taxes would raise about $200 million. “We are not interfering with the sovereignty of any Indian nations,” Mr. Paterson told reporters at an unrelated event in Harlem. “We are just making changes to the way we distribute cigarettes in our state.”

But the Times misses the crux of the 15 year old battle to get a level playing field in the state-it has not been a deference to Indian sovereignty that has forestalled tax enforcement-it has been the fecklessness of the state's chief executives: "Because tribes are considered sovereign nations, New York State has not collected taxes from Indian tribes, allowing them to sell cigarettes for significantly lower prices than non-Indian competitors. As cigarette taxes increased over time, cigarette sales boomed in Indian reservations, becoming the backbone of the economies of some tribes."
So we await the adjudication of this matter with that old deja vu ad nauseum sense of Bill Murray in Groundhogs Day. Once again, tax payers and store owners-along with the dwindling number of stamping agents-are being forced to sit and wait for justice delayed to become justice. It's long past time.