Christmas tree tax: White House pulls it, for now

Christmas tree tax would have been imposed on producers, not consumers. But the 15-cent levy drew so much conservative fire that the Obama administration delayed implementation of the Christmas tree tax. 

Daniel Shanken/AP/File
In this file photo, the 21-foot tall Christmas tree stands in the Rotunda at the State Capitol in Harrisburg, Pa. The Obama administration has come under fire for the so-called Christmas tree tax, a 15-cent fee on tree producers that would go towards a USDA promotional campaign for fresh trees.

The so-called “Christmas Tree tax” had all the makings of a grand political theater.

After the US Department of Agriculture (USDA) approved Tuesday a 15-cent tax on fresh Christmas trees, some conservative Republicans fired back at the Obama administration.

A “Grinch move,” Rep. Steve Scalise (R) of Louisiana told Fox News.

"A marketing slush fund for the Christmas tree industry,” Sen. Jim DeMint (R) of South Carolina said in his blog.

So on Wednesday, the day the Christmas tree tax was to take effect, the Obama administration delayed it.

Have Christmas tree buyers been spared another onerous tax? Hardly.

The 15-cent tax per tree was going to be levied on growers and importers, not consumers. The monies would have gone to a new Christmas Tree Promotion Board, which would fund a national campaign promoting  the sale of fresh Christmas trees. The USDA has launched similar campaigns for other agricultural products, including beef, pork, poultry, and dairy. The end product would have been ads along the lines of the “Got Milk”  or “Beef: It’s what’s for dinner” campaigns. 

“This program was requested by the industry in 2009,” the National Christmas Tree Association stated in a press release. Some 90 percent of Christmas tree growers who responded to two industry-wide surveys were “in favor of the program.”

“The program is not expected to have any impact on the final price consumers pay for their Christmas tree, “ the association added.

The impetus for the ad campaign is increased competition for the Christmas tree industry.  According to the USDA, the sale of fresh trees dropped from 37 million in 1991 to 31 million in 2007. Meanwhile, artificial tree sales nearly doubled to 17.4 million from 2003 to 2007.

The new fee was an effort to curb those losses.

Nevertheless, the move generated serious political backlash.

The fee is a “ludicrous political misstep,” Senator DeMint wrote in his blog. “The $2 million the Obama Administration expects the tax to raise will not reduce the deficit or cover needed government services."

"I can tell you unequivocally that the Obama administration is not taxing Christmas trees,” retorted White House spokesman Matt Lehrich. “What's being talked about here is an industry group deciding to impose fees on itself to fund a promotional campaign. That said, USDA is going to delay implementation and revisit this action."

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