NATURAL TAXATION OF TIMBERED MINING LAND 



409 



land, when the wild growth has once 

 been cleared. On the contrary, the en- 

 tire release of timberland from taxation 

 is class legislation and a denial of com- 

 munal rights in land values. 



Any efficient system for woodlands 

 must include not only their correct taxa- 

 tion, but a strict control of their har- 

 vesting. A permit to cut timber over 

 any considerable acreage should only 

 be given after the logger's plans have 

 been approved by the State forester, 

 even when the land is privately owned. 

 In this way, scientific methods of cut- 

 ting could be assured and the dangers 

 of soil destruction and forest fires elimi- 

 nated. 



A royalty system, based on a stump - 

 age charge on the felled trees, has 

 worked well in the public forests of 

 British Columbia and is the method now 

 commonly employed here, by private 

 landowners, in selling their timber to 

 loggers. The same scheme could be 

 applied to the taxation of private wood- 

 land by making it tax-free until cut, 

 when it would pay to the State the same 

 proportion of its gross stumpage value 

 as was assessed on the annual economic 

 rent of farming or townsite land. In 

 order to prevent the holding of large 

 tracts of ripe timber for speculative pur- 

 poses, as is now done in the case of 

 Southern pinelands, another proviso 

 would be necessary. This could be ef- 

 fected by charging an annual stumpage 

 tax against all ripe timber whether cut 

 or not. This tax on a given tract would 

 be the minimum stumpage annually due 

 to the Government, in case of a system- 

 atic cutting of the timber in sections, on 

 some approved plan of permanent forest 

 preservation. This advance stumpage 

 tax could be deducted from the amount 

 to be collected, when the timber was 

 actually reaped. It would thus not 

 mean double taxation or the undue forc- 

 ing of legitimate cutting arrangements; 

 but it would make it too expensive for 

 any one to hold great areas of ripe 

 timber unexploited, for speculative pur- 

 poses. 



The relative value of different wood- 

 lands is easily estimated, as the trees 



are in plain view and it is only necessary 

 to note the number and size of the 

 trees of each species and to figure the 

 factors of expense in transfering the 

 timber from the forest to the market. 

 For mining land, the valuation is more 

 complex as the minerals are originally 

 hidden underground and the net value 

 of many types of deposit can not be 

 estimated till the ore has been brought 

 to the surface and worked over into its 

 marketable form. A royalty on output 

 is thus the most practical system of as- 

 sessment, and not only is it the method 

 of taxation now used by the Mexican 

 government for its great mineral indus- 

 try, but it is the time-honored scheme 

 used by private landowners, both here 

 and in Great Britain, as a means of col- 

 lecting revenue from mining land. 



During the Spanish rule in America, 

 one-fifth of the output of metals (gold 

 and silver mostly) went to the crown as 

 a tax ; and, though the percentage taken 

 has varied, the bullion tax is still a 

 favorite method of collecting mining 

 revenue in free Spanish America. 

 Such a tax on gross output, however, 

 though easy to assess and collect could 

 only conform with natural-tax princi- 

 ples when the cost of bullion produc- 

 tion was the same for all mines, and 

 this is never the case.. 



Where a mine is both owned and 

 operated by the same company, the sim- 

 plest way, to levy a land-value tax, is to 

 take a percentage of the net profit re- 

 maining, after interest on betterments 

 (as well as operating and maintenance 

 expenses) has been deducted from the 

 gross earnings. This would be an in- 

 come tax, assessed on the unearned in- 

 come only, and thus would dififer from 

 the Montana system, which levies on 

 the whole net income without deducting 

 interest. When the operator only leases 

 the mining ground from the landowner, 

 it is customary to pay a certain royalty 

 per ton on all ore extracted ; the ta.x 

 should in this case be assessed against 

 this royalty (provided it represents the 

 whole economic rent), which is anala- 

 gous to the stumpage payment on tim- 

 berland. 



