The Christmas Tree Tax: Worst Public Relations Idea of the Year, or Ever?

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When journalists discovered yesterday that the Federal Registry included a new 15-cent tax on fresh Christmas trees, they cried "War on Christmas!" and accused President Obama of trying to destroy American traditions. This was fairly silly, of course, but no more silly than the tax itself.

The administration was never trying to destroy Christmas. (It suspended the fee this afternoon.) In fact, it was trying to save Christmas -- for the Christmas tree lobby. The fee was requested by the National Christmas Tree Association to pay for a new marketing campaign to save itself from further collapse.

Fresh-tree sales fell by 16 percent in 16 years to 31 million in 2007. A 2004 article on the crisis in fresh trees reported that in 1990, roughly equal numbers of households put up real trees and fake trees -- about 35 million each. "A decade later, the split was 32 million live and 50.6 million artificial," they said. (If anybody's "killing Christmas" by letting pine trunks rot in parking lots, it's Christian families and their fake Christmas trees.)

The Christmas Tree Lobby rightly freaked out. They lobbied the Department of Agriculture in 2008 to fund a "national research and promotion program for Christmas trees" paid for with a fee on large domestic producers. As far as consumers are concerned, that marketing finance fee is a tax enshrined under President Obama. It follows, therefore, that the president hates Christmas and is trying to destroy it.

But this isn't really a story about Obama, whom I'm guessing did not place an emergency call to the Agriculture Department demanding an immediate tax on all plants relating to Christian holidays. Instead it's a story about a horrendously stupid PR failure on the part of the Christmas tree lobby. Consider this logic: In order to improve the marketability of fresh Christmas trees, the Christmas Tree Lobby proposed taxing Christmas trees. Marketing fail.

It's also a story about technology disrupting legacy industries. The millions of families who buy fake Christmas trees this year are doing so because they prefer plastic over bark. The fact is that fake Christmas trees are kind of awesome. They don't shed. They don't die. They don't leave inextricable artifacts in your living room carpet's fibers. And over the course of their lifetime, they save families money. That's why nearly 20 million families have made the switch in the last 20 years.

The National Christmas Tree Association, it turns out, is like so many of this economy's prognosticators and analysts: Looking for cheap marketing solutions to a problem that's all about market fundamentals.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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