Just a few months ago, Congress forced the U.S. Department of Agriculture (USDA) to impose the infamous Christmas tree tax on Christmas tree producers and importers to pay for a promotional campaign for that industry. Now, some in Congress want to create a similar program for concrete masonry products.
Members of the masonry industry want to develop a program to stimulate their industry through research, education, and promotion. Instead of having this be a voluntary system, industry players have turned to the federal government for assistance in setting up a compulsory program through the Concrete Masonry Products Research, Education, and Promotion Act of 2013 (H.R. 1563, S. 429). The program would be run by the Department of Commerce and the Concrete Masonry Products Board, which would be made up of 25 members appointed by the Secretary of Commerce.
Once a majority of eligible concrete masonry product manufacturers vote to create this promotional program, the Department of Commerce would force concrete masonry product manufacturers to pay for it. The legislation calls for concrete masonry product manufacturers to pay an “assessment” to the Board that would begin at $0.01 per concrete masonry unit sold (this includes concrete blocks and related units) and be capped at $0.05 per unit. The number of votes a manufacturer receives would be based on the number of machine cavities in operation a manufacturer has, thereby favoring larger manufacturers.
The industry as a whole or a subset of the industry could have created a research and promotional body on its own. If there’s not enough support from their own industry for such a program, that doesn’t justify government involvement and forcing an assessment on manufacturers. When an assessment enforced by the government is no longer voluntary, it’s a tax. Proponents will try to spin it otherwise, but whatever name one gives it, it’s a mandatory assessment that must be paid, and the full power of the government will be used against those who don’t pay into the program. The Department of Commerce acts as the concrete masonry industry’s enforcer, punishing manufacturers who fail to pay their assessment.
This masonry tax would also hurt consumers. The new assessment would ultimately be paid for by those who buy concrete masonry products. Although $0.01 per unit or $0.05 per unit may not seem like a lot, the Congressional Budget Office estimates the assessment would yield on average $14 million per year. Concrete masonry product manufacturers would likely not absorb the added costs driven by the tax, especially if it’s forced upon many of them by the government. Consumers would foot the bill.
This legislation will mean more government interference in the operation of free markets on behalf of special interests—specifically, larger businesses at the expense of smaller concrete masonry product manufacturers and American consumers.
Hanna Hebert is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please click here.