200 



'•(4) When classified, land planted with forest trees under specified 

 conditions, or young forest not more than ten j-ears old to be taxed annually 

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

 lished as indicated in (2). and a yield tax of 10 per cent, to be levied on tho 

 value of the timber when cut." 



The remaining recommendations apply only to conditions in Con- 

 necticut and need not be given here. 



The system of taxation here recommended is based on sound forestry 

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

 However this may be further simplified since the ol).iect of levying a smaM 

 land tax in Connecticut is to prevent impoverishment of those townships 

 where there are large areas of forest, a condition which does not exist in 

 this state. A reasonal>le yield tax is all that is recjuired 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 Professor F. R. Fairchild of Yale University: 



"There is a tendency among the progressive states of Euroi)e towarJ 

 .agreement upon the general outline of tax system. As a rule the tax 

 systems of European states are based primarily uiton iuT-ome, rather than 

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

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

 with the .size of the income. . . . 



"Forests in Europe are ordinarily subject to state taxation and to local 

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

 three -mT'ortant taxes: (1) the income tax, (2) the ground tax, and (3) 

 the property tax. 



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

 the productivity of tiio soil and is measured by the yield which is normally 

 to be expected in view of the general character of the soil and the use to 

 which it is devoted. It is not based upon the actual income I'eceived fron 

 any particular piece of land. Xo account is taken of the peculiarities either 

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

 owner. Having determined the quality of the soil and the general char- 

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

 as normally prevails in that region. Also when the prevailing kind of 

 v-ood and management have been decided upon, no account is taken of 

 peculiarities in the condition of a particular forest. The owner who, by 



