House Speaker Paul Ryan and Senate leaders announce their framework for Tax Reform. (Photo: Speaker.Gov)
The Senate has given up on destroying Medicaid and much of the health care system and it’s now focused on restructuring federal taxes.
This is Trahant Reports.
So how does Indian Country fit into a tax framework? The larger issue of tax reform and its impact on Native Americans is a complicated question, one that starts with the definition of “taxes.” Most so-called middle-income wage earners pay income taxes. But roughly one-third of all wage earners do not pay income taxes — and that would include a lot of tribal citizens, especially those living in tribal nations. There are nearly 150 million tax returns filed every year and 36 million of those end up paying no tax at all. Another 16 million had taxable income but didn’t pay anything because of tax credits, deductions and other adjustments.
Many of Indian Country’s working class especially benefit from one such credit, the Earned Income Tax Credit. This is a successful program that returns real cash to some 7 million families; a paid bonus, of sorts, for working.
I looked at the counties with significant Native American population and there is some fascinating data from the Internal Revenue Service, based on 2015 tax returns.
In Oglala Lakota County, for example, some 2,010 taxpayers out of 3,980 collected an average of $3,020 from the Earned Income Tax Credit. The bulk of that was collected by families earning less than $25,000.
The Earned Income Tax Credit is also critical to many Navajo families. In Apache County, Arizona, that includes a large portion of the Navajo Nation, and some 27,172 people take advantage of the Earned Income Tax Credit. And, like Pine Ridge, most earn under $25,000 a year, but the amounts are significantly more, an average return of a little more than $4,000.
There are similar numbers in the Bethel Census Area of Alaska. Nearly 2,400 people claimed the Earned Income Tax Credit and most of the workers earned under $25,000 and averaged a refundable return of $2,738.
My point here is that this one policy that is essential to Indian Country because it benefits so many people who have jobs yet barely earn a living wage.
No matter how you look at the data, Indian Country has a stake in the debate ahead.
I am Mark Trahant.
