PRESENT STATUS OF FOREST TAXATION IN THE 

 UNITED STATES 



By M. K. McKay, Ph. D. 

 Department of Ecoiioiiiics, Neiv Hampshire College 



INTRODUCTION 



That the development of the relation between forestry and taxation 

 has not, in most of our States, received the attention at the hands of 

 legislators which it so justly and so urgently deserves still remains 

 true. Economists and those conversant in matters of taxation, and 

 indeed the rank and file in general, are cognizant of the fact that the 

 relationship between the taxation and the proper development and con- 

 servation of forests is a very significant one. In spite of this knowl- 

 edge and in spite of the reports of many special commissions appointed 

 to investigate the subject, the majority of our States continue to tax 

 forest property in the same manner as other property is taxed, giving 

 little or no attention to its peculiar and inherent characteristics. 



Fair and equitable treatment of timber property in matters of taxa- 

 tion involves many difficulties, perhaps more than in the case of any 

 other natural resource. Here both development and subsequent conser- 

 vation are closely associated with taxation. Most of the Common- 

 wealths continue to use the general property tax in making levies upon 

 forest properly. This practice (by those conversant with the problems 

 of taxation) is known to be wrong and can be defended neither in 

 theory nor in practice. Its defects are too well known to need lengthy 

 comment in this article. Prof. Fred R. Fairchild, of Yale University, 

 one of the leading authorities in forest taxation, has this to say regard- 

 ing the general property tax as applied to forests: "A property tax 

 strictly enforced must inevitably place an excessive burden upon for- 

 ests as compared with ordinary investments yielding a regular annual 

 income. It might easily take away from one-third to one-half of the 

 entire income and very much more under certain conditions. This 

 answers what the law clearly requires : that the forests be taxed each 

 year on their true value, land and timber together. Forestry should 

 not be subjected to such an unjust burden." 



There would appear to be no injustice in taxing forest lands as other 



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