Adam N. Michel
We went Christmas tree shopping with the kids last weekend. Every year, the ritual reminds me of some of the strangest federal taxes on the books and one of the clearest examples of government-sponsored industry collusion.
Most people have never heard of this small 15-cent tax that is part of the Christmas tree check-off program or the almost two dozen other similar programs through which the government levies a billion-dollar tax on private industry to fund compelled speech and industry-directed research.
Taxing Christmas
Federal commodity promotion authority, also known as checkoff programs, requires producers to pay mandatory fees to fund research and marketing campaigns for generic products. The result is government-funded marketing campaigns, such as “Got Milk?” “The Incredible, Edible Egg,” and “Beef. It’s What’s for Dinner.” The Christmas tree check-off program is one of the most recent additions.
In 2011, the Obama administration proposed a national Christmas tree checkoff, based on broad authority given to the USDA to establish new commodity tax and promotion programs at the industry’s request. The backlash was immediate and bipartisan. News outlets mocked the idea of a federal Christmas tree tax, and the White House withdrew the rule.
In 2014, Congress quietly revived the tax in the farm bill. That is why this Christmas season, the live tree you purchase will include the cost of the 15-cent tax assessed on growers. The program raises roughly $2 to $3 million per year, depending on sales. That money funds national advertising campaigns and promotional research under the supervision of a government-sanctioned board dominated by industry insiders.
A Forest of Checkoff Cronyism
The Christmas tree tax is one of 22 different USDA checkoff programs covering everything from beef and pork to blueberries, mangos, and paper. And there’s a pending proposal for an Olive Oil Research and Promotion Program. Together, they raised nearly $1 billion in mandatory industry taxes in 2024.
These promotion boards are industry-led and organized entities endowed with the power to tax, enforced by the feds. Once collected, the funds are controlled not by Congress but by the industry-dominated boards that decide how to spend Americans’ money on advertising campaigns, market development, and industry-favorable research. The result is a government-backed marketing monopoly where participation is mandatory, and competitors are forced to subsidize messages they oppose.
The abuses are well documented. In 2008, the American Egg Board was caught trying to divert $3 million in mandatory checkoff funds to fight a California ballot initiative that restricts animal confinement. Years later, the same board was exposed for pursuing a campaign against “Just Mayo,” a vegan mayonnaise alternative. Whether it’s the dairy industry’s war against plant-based milks or cotton’s campaign against synthetic alternatives, check-off boards often go far beyond neutral commodity promotion, using mandatory check-off funds to finance research and messaging aimed directly at discrediting rival products.
There are also serious constitutional issues. These programs compel private producers to fund speech they may disagree with under the legal fiction that it counts as government speech. This doctrine allows the government to evade basic First Amendment protections.
To end these abuses, Congress should repeal all commodity promotion authorities. If an industry believes collective marketing is valuable, it should fund it voluntarily.
Short of full repeal, Congress could at least end the mandatory nature of checkoffs and increase transparency. The bipartisan Opportunities for Fairness in Farming Act of 2023 takes a step in that direction by increasing oversight and curbing conflicts of interest. Future reforms should also include a producer opt-out from participation in the program.
Full repeal is the only way to fully fix the underlying constitutional and economic problems of the USDA check-off programs.