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Christmas Tree Tax: Could You Pay More For a Christmas Tree?

A Christmas tree tax has been announced this week by the Department of Agriculture on all natural tree distributors.

The 15-cent tax will only be applied to freshly-cut trees, but still should raise significant revenue. Every year 25 to 30 million trees are cut down and sold to various American families.

The small tax was signed into law to create a committee, whose purpose is to raise the awareness, image, marketing effectiveness, and overall sale of Christmas trees.

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The legislation will not apply to small mom-and-pop shops selling Christmas trees, though. Only larger retailers, those selling 500 Christmas trees or more, are required to pay the extra levy. The 15-cent tax may not seem like much when mentioned alone, but when multiplied by thousands of trees, it adds up.

This is why it is likely that distributors will do what they always do when costs are raised – pass the increase on to the consumers. This means raised prices for bigger suppliers, who are already struggling to market their trees, according to the federal government.

Conversely, smaller shops could benefit from the tax. Because they are not affected, they could keep prices stable or even cut them, attracting more customers. They would have to be careful not to sell over 500 trees, however.

The government response to this has been largely quiet, save for one man.

David Shipman, the Acting Administrator for the Agricultural Marketing Services of the USDA, claims that the new increase “is not a tax nor does it yield revenue for the federal government,” according to Forbes.

Technically, the legislation is more of a fee, and technically, someone will still have to pay more come Christmastime.

Some conservatives, who are usually advocates of smaller and less regulatory government action, do not agree with the latest extra charge. To them, government interference in the market isn’t positive.

David Addington, one such conservative and vice president of the Heritage Foundation, said, “If it's one thing I think the free market could handle, it's letting people decide what kind of tree they want to buy for Christmas."

Although the fee is a relatively small issue to oppose, Addington could be right.

Because there is no fee for purchasing artificial trees that last longer and cause less waste, some customers, if faced with higher costs, may abandon real Christmas trees altogether.

The fee will be instituted for the next three years, and then it will be decided if the committee has succeeded, and if the law is still necessary.

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