A “Christmas Tree Tax”? No, Just Good Old Crony Capitalism
Apparently, the Federal Government believes it necessary to remind you that you can buy Christmas Trees.
The blogosphere is abuzz today in response to a Heritage Foundation blog post about a government program that imposes a tax on Christmas tree growers for the purpose of, well, promoting Christmas trees:
President Obama’s Agriculture Department today announced that it will impose a new 15-cent charge on all fresh Christmas trees—the Christmas Tree Tax—to support a new Federal program to improve the image and marketing of Christmas trees.
In the Federal Register of November 8, 2011, Acting Administrator of Agricultural Marketing David R. Shipman announced that the Secretary of Agriculture will appoint a Christmas Tree Promotion Board. The purpose of the Board is to run a “program of promotion, research, evaluation, and information designed to strengthen the Christmas tree industry’s position in the marketplace; maintain and expend existing markets for Christmas trees; and to carry out programs, plans, and projects designed to provide maximum benefits to the Christmas tree industry” (7 CFR 1214.46(n)). And the program of “information” is to include efforts to “enhance the image of Christmas trees and the Christmas tree industry in the United States” (7 CFR 1214.10).
To pay for the new Federal Christmas tree image improvement and marketing program, the Department of Agriculture imposed a 15-cent fee on all sales of fresh Christmas trees by sellers of more than 500 trees per year (7 CFR 1214.52). And, of course, the Christmas tree sellers are free to pass along the 15-cent Federal fee to consumers who buy their Christmas trees.
Acting Administrator Shipman had the temerity to say the 15-cent mandatory Christmas tree fee “is not a tax nor does it yield revenue for the Federal government” (76 CFR 69102). The Federal government mandates that the Christmas tree sellers pay the 15-cents per tree, whether they want to or not. The Federal government directs that the revenue generated by the 15-cent fee goes to the Board appointed by the Secretary of Agriculture to carry out the Christmas tree program established by the Secretary of Agriculture. Mr. President, that’s a new 15-cent tax to pay for a Federal program to improve the image and marketing of Christmas trees.
There’s a few important things to note here. First of all, this is a tax on Christmas Tree growers, not on the trees that we all buy in parking lots and landscaping centers starting the day after Thanksgiving, although presumably at least some portion of the cost of the tax will be passed on and reflected in the price of the trees themselves. The tax itself, and the program, is apparently authorized by something called the Commodity Promotion, Research and Information Act of 1996 which set up various programs under the auspices of the Department of Agriculture to promote American agricultural products. Finally, it appears that this is something that the Christmas Tree industry lobbied for and wanted from the Department of Agriculture so, to the extent this tax is being imposed on them, it’s being imposed for something they want.
Not surprisingly, a good deal of the reaction to this on the right side of the blogosphere misses the point of why this program is such a mistake. The problem here isn’t that the Federal Government is imposing a “tax” on Christmas trees, but that it’s doing so to finance a program that it shouldn’t be implementing to begin with. The reason that the Christmas Tree growers want a program like this is because natural trees have been steadily losing market share to artificial trees in recent years. Artificial trees have been around for a long time, of course, and their benefits are pretty obvious. There’s no, or at least much less, danger of fire, they don’t cause a mess, their safer for people with allergies and homes with pets, and in the end they cost less than buying a comparably sized natural tree every year. It’s a choice consumers are making in increasing numbers apparently, and the natural tree industry obviously doesn’t like it.So, they decided to get the government involved in “promoting” natural Christmas trees.
Does anyone really need to be reminded that natural Christmas trees are available? Starting at least by the day after Thanksgiving, and in some places earlier than that, lots selling Christmas trees pop up all over the country. They’re pretty easy to find for the most part and, if you need reminding then driving around and seeing random people with trees tied to the roof of their car is pretty good advertisement. Then, there are all the trees you see in public places and shopping malls, the National Tree in Washington, D.C., and the tree at Rockefeller Center in New York City. Put simply, you’d pretty much have to be blind not to be aware of the existence and availability of natural Christmas trees in the United States.
Why, then, do we need a government program to promote their sale?
We don’t, of course, and in reality the government shouldn’t be involved in product promotion of any kind. That’s not their job, it’s the job of the industry itself. If tree growers want to create a promotional campaign, then they can do so through their trade association. This simply isn’t something that the government should be doing, especially for a product that is sold primarily in a domestic market. Instead of doing that, though, they lobbied the government to create a program to do it for them.
What we’ve got here, then, is another example of crony capitalism, with the government putting its finger on the scale to benefit the natural tree industry at the presumed expense of the artificial tree industry and, most likely, the taxpayers (that 15 cent a tree fee is unlikely to be enough to fund the program completely). That’s crony capitalism, folks. It’s a small example, but it’s just as wrong as subsidies for ethanol and specialized tax breaks for the oil industry. They’re all wrong, they all need to go.
Update: ABC News White House Correspondent Jake Tapper is reporting that implementation of the program is being delayed:
The U.S. Department of Agriculture is going to delay implementation and revisit a proposed new 15 cent fee on fresh-cut Christmas trees, sources tell ABC News. The fee, requested by the National Christmas Tree Association in 2009, was first announced in the Federal Registry yesterday and has generated criticism of President Obama from conservative media outlets. The well-trafficked Drudge Report is leading with the story, linking to a blog by David Addington, a former top aide to then-Vice President David Addington, at the conservative Heritage Foundation assailing the president thus: “The economy is barely growing and nine percent of the American people have no jobs. Is a new tax on Christmas trees the best President Obama can do? And, by the way, the American Christmas tree has a great image that doesn’t need any help from the government.”
The National Christmas Tree Association says the fee would fund a program “designed to benefit the industry and will be funded by the growers” and is “not expected to have any impact on the final price consumers pay for their Christmas tree.” According to the Federal Registry, the proposed Christmas Tree Promotion Board, which would be funded by the new fee, would launch a “program of promotion, research, evaluation, and information designed to strengthen the Christmas tree industry’s position in the marketplace; maintain and expend existing markets for Christmas trees; and to carry out programs, plans, and projects designed to provide maximum benefits to the Christmas tree industry” and to “enhance the image of Christmas trees and the Christmas tree industry in the United States.”
Nonetheless, the criticisms have apparently had an impact as the program is now being delayed.
Well, that was a pretty quick back down.