200 



'•(-1) When cliissiticd. land planted with forest trees under specified 

 conditions, or young forest not more tlian ten years old to be taxed annually 

 at a rate not to exceed ten mills on a valuation of the land alone estab- 

 lished as indirated in (IM, and a yield tax of 10 i)er cent, to be levied on tlu- 

 value of the timber wlien cut." 



The remaining recommendations apply only to conditions in Con- 

 necticut and need not be given here. 



The system of taxation liere recommended is based on sound forestry 

 principles, and on tlie whole would be applicable to Indiana conditions. 

 However this may be fui'ther siniplilicd since the object of levying a smaM 

 land tax in Connecticut is to pi'eveiit impoverishment of tliose townships 

 wliere tliere are large areas of forest, a condition which does not exist in 

 tliis state. A reasonable yield tax is all that is vcipiired in Indiana. 



The ideal system of taxation is that used in many European countries, 

 i. e.. the income tax. In this connection I wish to quote from a recent 

 article by I'rofessor F. R. Fairchild of Yale University: 



"Tliore is a tendency among tlie progressive states of Eui'oi)e towarJ 

 agreement n;>on the general outline of tax system. As a rule tlie tax 

 systems of JOnropean states are !)ased primarily upon in':'ome, ratlier than 

 upon property as in the United States. The general income tax is normally 

 the basis of the system ; tlie tax is usually progressive, the rate increasing 

 with the size of the income. . . . 



"I'orests in Europe are ordinarily subiect to state taxation and to local 

 or eommimal taxation. As a rule forests are subject to one or more of 

 three important taxes: (1) the income tax, (2) the ground tax, and (o) 

 the property tax. 



"The Ground Tax. — Tlie ground tax is a yield tax. It is based upon 

 the productivity of the soil and is mensnred liv the yield wiiii-h is normally 

 to be expected m view of the general character of the soil and the iise to 

 which it is devoted. It is not based upon the actual income reci'ived frori 

 any ])articnlar piece of land. iVo account is taktMi of the peculiarities either 

 in the management of the property or in the personal situation of the 

 owner. Having determined the (piality of the soil and tlx- general char- 

 acter of the forest stand, it is assumed that the Mianagcniciit is the same 

 as normally iirevails in that region. Also when the i»revailiiig kind ot 

 wood and management have Ik'imi dc( iiled upon no account is taken of 

 peci-.liariti(>s in the condition of a ])articular forest. 'I'he ownt>r who. by 



