There are 30 million Christmas trees sold in the U.S. each year and if a small group of Christmas tree growers get their way soon the federal government may be tacking an extra 15 cents on to the cost of every one of those trees sold.
You say you did not notice anything about Congress passing a new Christmas tree tax? You have not heard anything about a Christmas tree tax for the same reason you have not heard about the tax on eggs, or pork or milk or 18 other agricultural products. These are not taxes approved by Congress, these are fees requested by industry trade groups, assisted by the USDA (United States Department of Agriculture) and enforced by the Federal Government in a USDA program called Check-off programs
In 1996 Congress decided it would be a great idea to get involved in promoting agricultural products when it passed the COMMODITY PROMOTION, RESEARCH, AND INFORMATION ACT OF 1996. Basically this bill gives the USDA authority to create programs (referred to as Check-off programs) that are administered by a board appointed by the USDA. This board can assess fees on a agricultural product and the money collected is used to promote that defined product. Recently there was flurry of news interest when reported that Dominos Pizza had joined with the innocently named “Dairy Management” to promote Dominos new pizza that uses three times as much cheese. “Dairy Management” is the USDA check-off program to promote dairy products.
This is just the tip of the iceberg. In 2003 The Pork Board’s brochure reported: “Check-off funds were used by McDonald’s nationally to market The McRib pork sandwich.” And through the Pork Check-off program, pork items are added to menus at Taco Bell, T.G.I. Friday’s, McDonald’s, Burger King, Applebee’s and other restaurants across America.
We are talking about some real money; a 2008 CRS (Congressional Research Service) report listed over 700 million dollars worth or check-off fees collected in the last calendar year.
• Beef, $80.4 million
• cotton, $83.6 million
• dairy products, $278.7 million
• eggs, $20.2 million
• fluid milk, $107.1 million
• peanuts, $6.7 million
• pork, $60.8 million
• potatoes, $8.7 million
• soybeans, $82.8 million
$700 MILLION DOLLARS!!
So basically here is how it works. A group of citizens decides the products they sell needs a generic marketing program. This group petitions the USDA to create a Check-off Program that will collect a mandatory fee from producers of that product. The fee is used by a board - appointed by the USDA - to run advertising and promotion campaigns for that product. Remember the “Got Milk ads”? How about “Pork the other white meat”? That’s right - paid for with Check-off fees (or taxes depending on how you want to look at it).
The supporters of Check-off programs say “it’s not a tax, it’s just a mandatory fee,.” A fee collected and enforced by the federal government, that’s a lot different than a tax I guess. The supporters say “it’s not paid for with tax payer money”. Well where the heck did the money come from? Does it fall from heaven? Does it grow on trees? Of course it is tax payers money, if it costs an extra 15 cents to grow a Christmas tree, that cost is going to be passed on to the consumer. Those 700 million dollars of check-off fees collected come directly from the tax payers just like sales tax or federal excises tax. All money at the start is tax payer money. And if you are foolish enough to think government taxes are paid for by a business and not passed on to the consumer, well even then it is being paid for by a tax payer. Christmas tree farmers are tax payers too. So they can call it a fee all they want to but it doesn’t change the fact that it is a tax, a ghost tax.
What a perfect program - No worrying about that pesky congressional oversight of spending or tax collection, no worries about budget overview or executive branch oversight. Although there is no vote among anyone but a few people in the USDA to start a check-off program the bill does mandate that at some time period, 3-7 years generally, a referendum will be held to determine if the producers of that product want to continue the Check-off program. Apparently no one thinks it is a good idea to ask the producers if the like the idea until it has been collecting fees (taxes) for a few years.
If a group of like producers want to voluntary get together and pool their money to promote their product I say go for it. But what business is it of the federal government to be promoting live Christmas tree sales at the expense of citizens making artificial trees? Or what about Pizza Hut having to compete against Dominos latest campaign when they have funding from the USDA? Why should a department of the federal government be collecting these ghost taxes to be used to determine winners and losers in our economic system? And how much money is really spent setting up administering and tracking these systems, someone is paying for reports like the annual CRS report.
I am not always sure what exactly the USDA is supposed to be doing, but I am positive putting the artificial Christmas tree manufacturers out of business is not it.
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