COMMENT ON "FOREST TAXATION" 



December 15, 1921. 

 The Editor, JournaIv of Forestry. 



I read W. G. Hastings' article on "Forest Taxation" in the October 

 issue of the Journal of Forestry with a great deal of interest. It 

 reminded me of a point that I have felt to be very illuminating in study- 

 ing and teaching forest taxation and that Mr. Hastings did not bring 

 out very strongly. 



The assessed valuations for taxation of property in general are com- 

 monly based, both in theory and practice, on the market or sale values. 

 And market or sale values are very directly related to the return which 

 the property makes or can be made to make to its owner. Sometimes 

 this return is largely a potential one, as in the case of a man owning his 

 own horned f he did not own it he would have to pay rent for the 

 privilege of occupying it, or if he did not occupy it he could secure rent 

 for it from some other occupant. Usually the return is more concrete 

 and definite, as the produce from a farm or the profit from a mercantile 

 or manufacturing business. As we think over the whole field of the 

 various sorts of property which are used as the basis for taxation we 

 see that almost all of them readily can be and usually are figured as 

 yielding an annual return. In the business world in general this factor 

 of the annual return has controlling weight, in connection with the risk 

 involved, in determining the sale or market value of a property, and 

 hence the assessed value on which taxes are paid. 



When we consider a forest tract for taxation purposes we come to a 

 fundamentally dififerent matter in that we are no longer dealing with an 

 annual return, and this is the main point of this note. The return 

 from American forests is a periodic one, and the periods are usually 

 very long and more or less irregular. Given the length of rotation, 

 the stumpage value in the future, and the amount of the harvested crop, 

 the annual return could readily be figured, and on the basis of an annual 

 return a commensurate valuation to yield that return per year at some 

 standard rate of interest could readily be worked out and used as the 

 basis for assessed valuation. But the necessary data for this operation 

 cannot usually be predicted far in advance, and some other method of 

 assessment of valu; must be used. 



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