Yeah it can suffocate the tree and cause them to die. We dug some footings three years ago with a lot of obstructions and the only place to place spoils without repositioning the 580 was at the base of a tree. The inspector came by before we were able to move the spoils and lost his temper..... He called an ecologist out by which point we had moved the spoils and the ecologist looked at us and said everything was fine....
I do know when you see a mound of mulch at the base of a tree it will usually kill the tree.
If you cover the root flare, you will suffocate the tree. The root flare is the spot at the base of the tree where it begins to widen. When the root flare is covered, the tree will grow secondary roots over the top of the main roots that will inhibit the growth/functioning of the main roots
I think the best way to find the root flare is to find the first roots, and the soil should be just above them (maybe 1/2").
If you put soil/mulch/whatever around the base of the tree, it won't kill it immediately.
If you ever go around after a storm and see a tree which has snapped off at the base or slightly below the base, this may well have been caused by a weakened base due to it being buried.
I haven't ever done this, but one sees trees from time to time (valuable landscape trees) where someone has built a "well" around them, then raised the grade. Obviously trees can be growing down in a ravine, etc., so this will work, but you want to make sure that a clear area as big as the branches above is left open.
One of the worst examples of burying a tree happens when you see someone with a tree in their front yard and they make a circle of landscaping rocks around it maybe two feet high, then fill it with dirt.
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