One of today’s hottest stories on the web is the new Christmas tree tax. To say some people are outraged is an understatement. Opinions range from thinking it is foolish; to thinking it is an attack on Christianity. One person wrote that it is discrimination against Christians since Muslims do not buy Christmas trees and therefore do not pay the tax. By that standard most taxes are discriminatory since everyone in every class does not pay them. However inflammatory, discriminatory, or foolish this tax may be, the real problem, as with our entire tax structure, is the hidden cost.
One might ask, “Why all the fuss over a mere fifteen cents per tree?” The standard line from politicians and bureaucrats when implementing new taxes is always to focus on the seemingly insignificant amount of the tax. But the amount of the tax is not the whole story.
The following paragraph is from the online Federal Register at http://www.federalregister.gov/articles/2011/11/08/2011-28798/christmas-tree-promotion-research-and-information-order#p-116:
“An estimated 12,455 respondents will provide information to the Board (12,255 producers and 200 importers). The estimated cost of providing the information to the Board by respondents will be $348,975. This total has been estimated by multiplying 10,575 total hours required for reporting and recordkeeping by $33, the average mean hourly earnings of various occupations involved in keeping this information. Data for computation of this hourly rate was obtained from the U.S. Department of Labor Statistics.”
The estimated cost to businesses for the recordkeeping required collecting this tax is $348,975.00. In addition to the tax that is sure to be passed to customers, the customers will also repay these collection costs. But these costs will not be marked on an invoice as tax. They will come as price increases on the product, insulated from the downward pressures of competition and the faltering economy. The cycle is endless. Prices go up. Government expands, and our economy is less and less stable. Another point is that regardless of who pays the bill, 10,575 hours will be consumed doing government required paperwork that should be devoted to improving the businesses.
This is not isolated to a Christmas Tree Tax. The hidden costs to businesses and the increasing costs of government are out of control under our present tax code. Every tax on the books has hidden costs. Anyone who thinks businesses pay taxes does not understand that businesses only collect taxes and pass them to the government, while passing the costs of collection to their customers.
Surely, a nation that has the ability to put men on the moon has the ability to implement a tax code without hidden costs that smother businesses in paperwork, and escalate prices. Perhaps, the problems are ignorance of the system, apathy of voters, and lack of political will for politicians.
Jim
Good one Jim,
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