NCPA - National Center for Policy Analysis

A Tax on Christmas Spirit: The Christmas Tree Tax

June 12, 2013

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, says Daren Bakst of the Heritage Foundation.

Some in the Christmas tree industry sought to develop a promotional program to assist the 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.
  • 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 initially, the Obama administration backed away from imposing this tax and on November 17, 2011, the administration issued a stay of this tax.
  • The stay may now be lifted thanks to an amendment in the farm bill.

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.
  • 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.

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.

Source: Daren Bakst, "Obama's Christmas Tree Tax Is Back," Heritage Foundation, June 4, 2013.


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