Tax Situation in New Hampshire 479 



Assuming that $172.58 represents the loss to the town in 10 

 years on an average lot, and that one-half of the 65 cut-over lots 

 could have been saved for another 10 years by maintaining the 

 1908 assessments, the towns would have gained $5,608.85 in 

 consideration of their leniency in assessment, without regarding 

 what the owners themselves might have saved by increased 

 growth. 



It may be of interest to consider another lot which an owner 

 was forced to cut 10 years before the timber was financially 

 mature. The lot contained 35 acres of unusually thrifty growing 

 pine. Its increase in growth in 10 years would easily have been 

 100 per cent. The assessed value in 1911 was $1,200. In 1912 

 this was increased to $3,000. The owner was a farmer without 

 sufficient income to permit him to bear the increased tax burden. 

 The timber was sold and removed before the following April. 

 The assessed value in 1913 and each year following has been $4:50. 

 The town obtains the following in taxes on the lot for a 10-year 

 period at IJ^ per cent. 



3,000 X 1H% for one year $45.00 



450 X 1H% for 9 years 60.75 



Total for 10 years $105.75 



If the assessment had remained at $1,200 for the following 

 10 years, then the town would have received in taxes at 1^/2 per 

 cent the sum of $180.00, or $74.25 more than it actually did 

 receive. 



What does the owner lose in this instance by premature cutting? 

 The timber sold for $9,000. If the owner had kept this value 

 in growing timber for 10 years, the interest accumulation at 

 5 per cent together with the principal would amount to $14,670. 

 The taxes paid annually at l^/a per cent on a valuation of $1,200 

 at 5 per cent compound interest would amount to $237.67, making 

 a total cost of holding the timber to the end of the 10-year period 

 $14,907.67. In 10 years the timber would have sold for $18,000. 

 The owner, therefore, lost $3,092.33. 



From the point of view of town finances the only justification 

 for increasing the valuation on growing timber lots rests on the 

 assumption that the lots will not be cut as a result. When it is 

 shown in actual operation that over 50 per cent of the lots under 

 observation since 1908 have been cut following increased valua- 



