Christmas tree ‘promotion fee’ is just another hidden tax on consumers

By David McElroy · June 7, 2013

Have you heard about the Obama administration’s Christmas tree tax? It was all the rage to talk about it two years ago — and now it looks as though it’s back.

Some people say it’s not fair to call it a tax, but I think they’re arguing semantics. Let’s look at what’s really going on and why it matters.

The proposed fee right now is only 15 cents per tree. That doesn’t sound like an onerous amount to add to the price of a tree, but it’s another example of tiny increases that add up. Really, though, I’m bothered even more by what the fee is than by the thought of having to pay an extra nickel and dime per tree.

The federal government has set up various promotion boards over the years to be the advertising arm of a lot of industries, mostly agricultural groups. You know those ads you see for milk (“Got milk?”) that don’t promote any particular brand? That’s an example. You’ve probably also see ads for pork, beef, cotton and a dozen other things. Have you ever wondered who’s paying for those ads?

Everybody who buys those products pays for the ads. Here’s how it works. Congress will authorize a program for a particular industry that levies a fee on everybody in that industry in order to pool the money and make those ads. If you’re in that industry, you don’t have any choice.

For instance, if you’re raising beef cows, you have to pay $1 per animal. As the Beef Board helpfully points out, “No producer is exempt….”

Here’s the heart of the problem. This isn’t a voluntary expense on the part of certain business people in a particular industry. If you just glanced at the websites for these groups, that’s what you’d assume they are. But they’re not voluntary. The government requires anyone who wants to engage in these businesses to pay the fee to fund the groups.

In the case of Christmas tree producers, some people who own Christmas tree farms wanted to fund advertising to promote the use of live trees. Artificial trees have become more popular, so some of the business owners want advertising to promote the advantages of live trees. (The smell is enough of a reason for me to prefer live trees, so I like the real ones, personally.) But not every producer wanted to fund such advertising. They didn’t see the purpose or were happy with business as it was.

So the federal government is stepping in to force those people to pay for promoting their products, whether they want to or not.

This is a forced business expense that might or might not help the people paying the fee. But the people who want to pay for the ads say that it’s not fair for them to pay the cost of the ads, so the non-payers would be freeloaders if they refused. So the feds require everyone to pay.

Let’s say that some of the Christmas tree farmers wanted new trucks, so they planned to buy themselves new trucks, but they got the federal government to pass a rule that said every Christmas tree farmer also had to buy new trucks — so nobody would have the competitive advantage of not having to spend money for new trucks. Some of the farmers would protest and say, “But we don’t need these new trucks,” but the federal government would require the expense anyway.

The analogy obviously isn’t perfect, but it makes just as little sense.

If certain farmers want to have voluntary groups to promote their industries, they should be more than welcome to do that. But if other farmers don’t see the need for it, they shouldn’t be forced to go along with business expenses that they don’t want or need.

There are many things wrong with the U.S. agricultural sector. This kind of forced socialized advertising is just one of them.

I hate it that every purchaser of a Christmas tree will pay a little extra. Even more, though, I’m opposed to the principle that businesses can be forced into expenses that they don’t choose for themselves. It’s wrong.

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