Abstract
In this statement presented to the Senate Committee on Finance, the author makes several points: (1) potential investors in Indian country are deterred by the uncertain tax situation they would face; (2) Congress has it within its power to rationalize the taxing structure in Indian country-to lessen the extreme uncertainty attributable to multiple taxing jurisdictions and the overlay of American Indian law principles that must be applied to resolve jurisdictional disputes; (3) some special tax benefits intended to further investment in Indian country, like accelerated depreciation and the Indian employment credit, have not been fully effective because their status has been redetermined on an annual, or almost annual, basis; and, (4) given the statutory structure that now exists, the Internal Revenue Service has been justified, when deciding whether financing undertaken by American Indian nations will be eligible for tax-exempt status, in interpreting the term "essential governmental function" narrowly.