News & Insights

New Oxford Economics study estimates that leading de minimis bills would require up to $3.2 billion in new Congressional Appropriations, the equivalent of nearly 40,000 new CBP officers

(Washington D.C.) – Oxford Economics released a study today showing that implementation of the leading legislation aimed at weakening the de minimis exemption would require billions in new Congressional spending each year. The de minimis exemption is a long-standing feature of U.S. law that allows low-value goods (under $800) to come into the US without paying import taxes that cost the government more to collect than they raise. The study found that HR 4148 (Rep. Blumenauer’s proposal) would cost the government $3.2 billion in 2025 alone, or the equivalent of 39,000 CBP officers. HR 7979 (Rep. Murphy’s proposal) would cost the government $1.6 billion in 2025 alone, equivalent to the cost of 20,000 officers.

These increases would be recurring expenses that would require new appropriations from Congress. The study notes that the need for additional staff is “exacerbated by the fact that CBP is already short by over 4,800 officers relative to what the agency’s Workload Staffing Model (WSM) has determined as necessary to accomplish the Office of Field Operations (OFO) current mission, as reported to Congress.” This would mean that CBP would face the choice between using its resources to collect a limited amount of revenue on low-value imports or using such resources to focus on other key missions at U.S. ports of entry, such as targeting, inspecting, seizing, and issuing penalties.

The study concludes that “rolling back the de minimis provision would considerably increase costs for consumers and small businesses, while costing the government considerably more than the revenue it is expected to raise.”

Key findings from the Oxford Economic report released today:

• Rep. Blumenauer’s proposal would cost the CBP $3.2 billion in 2025, while generating $627 million in revenue in that year according to the CBO, implying that the bill would result in a large net cost to taxpayers.
• Rep. Murphy’s proposal would also cost more than it brings in. The Oxford report estimates that CBP would need to spend an additional $1.6 billion in 2025 to implement this bill, which would only raise $1.0 billion in revenues during that same year.
• These amounts would require new appropriations, as CBP does not retain the revenue it collects.
• The elimination of the de minimis threshold for some US imports would inevitably slow customs operations, increase paperwork, and reduce CBP productivity.
• Under Rep. Murphy’s proposal, affected goods will see a 55% price increase for end users. This is expected to affect 330 million packages in 2025.
• Under Rep. Blumenauer’s proposal, affected goods will see a 40% price increase for end users. This is expected to affect 646 million packages in 2025.
• The report also points out that de minimis volume, according to experts, will be routed into the postal environment, where there have been significant enforcement challenges.

The Oxford Economics study adds to other recent research on the increased cost to consumers and taxpayers of degrading de minimis. In June, economics professors from Yale and UCLA published a study that found that degrading de minimis would be a regressive tax on low-income consumers, disproportionately tax minority households, and result in a 12 percent tax increase for America’s poorest neighborhoods where families are struggling with inflation and rising costs.

This week, The American Action Forum (AAF), a think tank led by former Director of the Congressional Budget Office Douglas Holtz-Eakin, also released a study showing that eliminating de minimis would result in $8 billion to $30 billion in additional annual costs that would eventually be passed on to consumers and would harm small businesses.

Read more about how de minimis benefits U.S. businesses and consumers here.

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