Periodical Literature. 301 



The question of proper forest taxation has 



Forest lately agitated the forestry world of Ger- 



Taxation. many and Austria, as that of the United 



States, although from different points of 



view. 



Some fundamental principles have lately been decided by the 

 Austrian courts which may eventually become objects of ad- 

 judication with us. Hence we brief a long article by Dr. v. Bauer 

 on the subject. 



The main question is what constitutes the taxable property. 

 Where income tax is levied as in Austria and most German States, 

 the income of the preceding year or the average for the last three 

 years serves as basis. The next question arises, what is the tax- 

 able forestal income. Should it be the actual or that which under 

 proper management may be secured, or the net annual value 

 increment? The first position is that taken by the Austrian law. 

 This raises the question whether or not the sale of stock capital 

 beyond the annual increment or proper budget is not merely a sale 

 of property, hence the amount received not taxable because not 

 income. 



Originally the courts recognized that "the soil with the stock of 

 timber necessary for an orderly management is the source of the 

 income, the property." But in 1906 court decisions have entirely 

 reversed the attitude and declared that the soil alone is the pro- 

 ductive source and that the so-called wood capital can in no way 

 be counted as anything but product, which, to be sure, the owner 

 can harvest earlier or later: the soil rent is the basis or object of 

 forestry. For purposes of taxation, therefore, the fact that in 

 civil law grass, trees, fruit and other useful products of the earth, 

 as long as they are not separated from the soil, are considered 

 immoveable property, has no bearing upon the question whether 

 these are, when separated, sources of income, or form income 

 themselves. Any income resulting from fellings, whether eco- 

 nomically sound or not is subject to tax; the question of ripeness 

 has nothing to do in the case. "The distinction between mature 

 and not mature stands, since it only expresses what portion of the 

 forest may be exploited with due regard to annual increment and 

 to maintenance of a given wood volume, has significance only as 

 regards equality or inequality of the annual yield, but is no cri- 



