Revisiting the 'Christmas Tree Tax'

December 2, 2011

Three weeks ago, a national commotion erupted when the Drudge Report headlined a story from the Heritage Foundation on the Obama administration’s implementation of a new tax on Christmas trees. I noted here that the 1996 legislation enabling the U.S. Department of Agriculture to implement the tax received most of its support from Republicans, including co-sponsor John Boehner.

The National Taxpayers Union gives a tidy explanation of how the law almost led to the “Christmas Tree Tax”:

The Federal Agriculture Improvement and Reform Act of 1996 permitted producers of agricultural commodities such as beef, pork, or popcorn to create what are known as research and promotion programs, or “checkoffs.” These are analogous to unions: producers pay “dues” to the checkoff which works to fund research and advertising efforts on behalf of the industry represented. Board members are appointed by the Secretary of Agriculture who also has authority to enforce dues-payment. Because the dues are government-coerced, they are essentially taxes passed on to consumers.

There are currently 18 checkoff programs. And while the Obama administration quickly stopped the Christmas tree tax checkoff program from going into effect, there are still other agricultural commodity groups, such as the hardwood lumber industry, pushing for their own checkoff. There are also efforts to allow the creation of non-agricultural commodity checkoffs.

NTU notes that now another Republican wants to create a similar scheme at the Department of Commerce:

Congressman John Shimkus (R-IL) introduced H.R. 3395 to create the Concrete Masonry Products Board to promote and market concrete products. The Board would be made up of representatives of the concrete industry appointed by the Secretary of Commerce. Producers and importers of concrete masonry would initially be assessed $0.01 per concrete masonry unit sold in the United States. The Board will have authority to change the assessment rate, but it can be no higher than $0.05 per unit. The Secretary of Commerce would have authority to levy late-payment and interest charges on those producers who fail to remit an assessment.

That would be the same John Shimkus who received a “Taxpayer Hero” award from the Council for Citizens Against Government Waste in October. Carrying water for a special interest at the expense of consumers is not what I would consider to be an act of heroism. Worse, granting this authority to the Department of Commerce would add another layer of cement to the foundation (pun intended) of a bureaucracy that one former Commerce secretary derided as “nothing more than a hall closet where you throw in everything that you don’t know what to do with.” Fortunately, the bill only has two co-sponsors (Republican Rep. Richard Hanna of New York is one of them), so it’s probably not going anywhere.

Republicans who say they want smaller government should walk the talk by introducing legislation that would eliminate agencies and programs. For example, Rep. Mike Pompeo (R-KS) has introduced legislation to abolish Commerce’s Economic Development Administration. Otherwise, they’re just part of the problem, or—in the case of Shimkus and Hanna—they make matters worse.

See here for more on downsizing the Department of Commerce.


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