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It’s never too early for Washington, D.C., politicians to dampen the holiday spirit. The House Agriculture Committee approved an amendment to its farm bill that would lift the stay blocking implementation of President Obama’s Christmas tree tax. We should be thankful the Agriculture Committee doesn’t have jurisdiction over toys.
The Christmas Tree Tax
Some in the Christmas tree industry sought to develop a promotional program to assist its industry. After three failed attempts to set up a voluntary system, they turned to the federal government to do what it couldn’t: Force Christmas tree producers and importers to pay for a Christmas tree promotion program.
On November 8, 2011, the Obama Administration issued a final rule that approved a new program to help promote Christmas trees. The government would set up a Christmas Tree Promotion Board, with one of its goals being “to enhance the image of Christmas trees and the Christmas tree industry in the United States.” It isn’t clear why Christmas trees need help with their pristine and festive image—unless they are hiding something.
The new program would include a 15 cent “assessment” on fresh cut Christmas trees, which could eventually rise to 20 cents per tree. After significant backlash, in large part due to the efforts of The Heritage Foundation, the Obama Administration backed away from imposing this tax. On November 17, 2011, the Administration issued a stay of this tax.
This Is a Tax
There are many Christmas tree producers and importers that don’t want this new tax. Based on the comments received by the Department of Agriculture regarding the program, about 26 percent of the commenters opposed it. If producers and importers oppose the tax, they will still have no choice but to pay it.
Once an “assessment” is no longer voluntary and is enforced by the government, it’s a tax. The Christmas tree industry failed with its voluntary system and now has to use force to achieve its objectives.
The entire purpose of this program is for the Christmas tree industry to get the “troublemakers” into line. Unlike in a voluntary and private arrangement, the Christmas tree industry now has the government doing its dirty work by getting the government to enforce the tax and punish those who fail to comply.
This is also a tax on consumers. The new costs will be passed down to those who buy Christmas trees. The National Christmas Tree Association has claimed the extra costs wouldn’t be passed on to consumers. Maybe they were just in the Christmas spirit when they said this or had too much eggnog, but businesses don’t usually eat costs for no reason, especially businesses like Christmas tree producers who think they need government help to improve their bottom line.
A 15-cent tax may not seem like much. However, taxes are a death by a thousand cuts. One of those cuts shouldn’t come from the Christmas tree. One way to actually hurt the image of the Christmas tree is to make it a symbol of taxation during the holiday season.
What Should the House Do Next?
The House should make it a priority to repeal the Christmas tree tax if the farm bill is debated on the floor. While they’re at it, they should repeal similar programs that impose taxes on commodities. Businesses shouldn’t be forced to pay taxes against their will just because other businesses in their industry, likely businesses much bigger than them, are using the federal government to be their own taxman. Even the Grinch would disapprove of such policies.
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