Alex Zhang has posted “The Other Taxation: Tribes, Territories, and Fiscal Autonomy,” forthcoming in the Columbia Law Review, on SSRN.
Here is the abstract:
Native Americans pay taxes. Residents of the territories do not. Both live with the legacy of American imperialism. Both seek the elusive fiscal self-governance and autonomy promised by Congress. The Supreme Court—through preemption, the plenary-power doctrine, and tax interpretive principles—has hollowed out the Native tax base, forcing tribes to compete fiercely with Congress, states, and localities for revenue. By contrast, territorial residents pay no federal or state taxes on territorial-sourced income by edicts of Congress and geography. But such tax exemption enabled the creation of incentive regimes that have only invited more criticism of subordination. This Article argues that the conceptual underpinnings of the divergent tax treatment of tribes and territories are unsound. Under a more robust vision of fiscal autonomy, judicial limits on Native tax sovereignty are misguided. The territories’ wide latitude in designing revenue streams merits heightened scrutiny. While imperfect, a uniform, nonrefundable federal income-tax credit for tribal and territorial taxes paid is a promising path forward. This Article thus provides the first systematic study of subfederal taxation beyond states and localities—the “other” American taxation often overlooked in scholarship.
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