Healing in Indian Country: Ensuring Access to Quality Health Care

Comments for the Record

Senate Finance Committee

Healing in Indian Country: Ensuring Access to Quality Health Care

Wednesday, August 8, 2012, 11:00 AM MDT

By Michael G. Bindner

Center for Fiscal Equity

Chairman Baucus and Ranking Member Hatch, thank you for the opportunity to submit these comments for the record to the Senate Finance Committee.  As always, our comments are in the context of our four part tax reform plan:

•             A Value Added Tax (VAT) to fund domestic military spending and domestic discretionary spending with a rate between 10% and 13%, which makes sure very American pays something.
•             Personal income surtaxes on joint and widowed filers with net annual incomes of $100,000 and single filers earning $50,000 per year to fund net interest payments, debt retirement and overseas and strategic military spending and other international spending, with graduated rates between 5% and 25% in either 5% or 10% increments.  Heirs would also pay taxes on distributions from estates, but not the assets themselves, with distributions from sales to a qualified ESOP continuing to be exempt.
•            Employee contributions to Old Age and Survivors Insurance (OASI) with a lower income cap, which allows for lower payment levels to wealthier retirees without making bend points more progressive.
•            A VAT-like Net Business Receipts Tax (NBRT), which is essentially a subtraction VAT with additional tax expenditures for family support,  health care and the private delivery of governmental services, to fund entitlement spending and replace income tax filing for most people (including people who file without paying), the corporate income tax, business tax filing through individual income taxes and the employer contribution to OASI, all payroll taxes for hospital insurance, disability insurance, unemployment insurance and survivors under age 60.

The effects on various tribes and territories will vary.  We will address each in turn.  OASI provisions are, of course, not relevant to this analysis.  Our analysis draws heavily from our comments of May 15^th of this year, which addressed tax reform rather than health.  As you recall, we stated:

Native American tribes will be affected in the same manner as states.  To the extent that they have a tribal tax system, they will likely bring it into conformity with the federal system.  Tribes which exist mainly on casino revenue, where members pay no direct taxes, can still benefit from harmonizing with the federal tax reforms we outline here.  This is especially the case if an NBRT is adopted with offsets for employers who perform or fund social welfare functions in lieu of payment of taxes.

Our proposal replaces TANF with privately or publicly provided adult education, with participants funded at the minimum wage and receiving the same refundable child tax credit as workers, along with the same health plan as employees of the provider organization.  This feature could also be used to replace Tribal TANF, allowing participants to achieve real education rather than job training for low wage work.  This is especially the case if program participants can then transition into either technical education or even college – where the employer pays a wage while paying tuition in exchange for both a NBRT credit and a work requirement/student loan.

To the extent that health care is provided publicly, it will be provided through training programs or through sponsored agencies who replace what the private system would otherwise provide on the reservation.  This would be especially true for providing care to senior citizens.

Tribal employers would, of course, have the same federal tax structure as non-tribal employers in both Indian country and in the nation at large.  Tribal employers and non-tribal employers in Indian country will feel the same impacts as anyone else resulting from health care reform, especially if the stock market decides that private health insurance is unsustainable.  If this happens, the Indian Health Service could either remain separate, along with the Veterans Health Service, or be incorporated into any subsidized Public Option or Single Payer System.  While Veterans’ health will be subsidized by the high income surtax, Indian Health may or may not be.  If funded by the Net Business Receipts Tax, then tribal and non-tribal employer in Indian country would have the same offsets available to them for providing alternate health care services for employees and/or retirees.  

Among our recommendations is the strengthening of regional government, which will include the distribution of federal land, with Native People’s getting first claim to any land they hold by treaty, which could be retained to be used or rented or sold.  It is anticipated that ownership and control of this land will make all nations richer and will end the need for a taxpayer subsidized system, although the structure of the Indian Health Service could then be transferred to tribal governments to be run by each tribal nation with their own revenue from extraction, land rent or gaming.  We suspect that if the nations controlled the service without interference and federal funding constraints, but with adequate resources through regaining their birthright, that quality would dramatically increase (provided they went with a tribal based rather than an employer based system).

Thank you for the opportunity to address the committee.  We are, of course, available for direct testimony or to answer questions by members and staff.