FOREST TAXATION 157 



5 per cent. Basing the taxes on sale value and revaluing every 

 10 years, the total cash taxes paid during the 5o-year period 

 amount to $43.57 per acre, which is slightly less than the amount 

 paid on forests B or C for the same period and over four times 

 as large as the sum paid by forest A, which is taxed solely on 

 the value of soil. 



Adding compound interest to these annual taxes (Formula 

 Ilia), the total tax, with interest, amounts in 50 years to $86.53, 

 equalling 51.3 per cent of gross stumpage value, or 53.4 per cent 

 of net cash profit on stumpage. But basing the net value of 

 the stumpage on the margin over costs with interest or $104.86, 

 we find taxes and interest absorbing 82.5 per cent of this margin. 



These taxes are computed as follows: 

 Let e = annual tax on original assessed value. 



e' = annual tax on revaluation at 20 years. 



e" = annual tax on revaluation at 30 years. 



e'" = annual tax on revaluation at 40 years. 



Then ,',",'" = > 



o.op o.op o.op o.op 



Sum of taxes (Formula Ilia), 



[l(E-i.op*>-E+E f )i.op w -E"+E" f li.op w -E"+E'"]i.op w -E" r . 

 $5.00 X 0.02 = $0.10, annual taxes for 20 years. 



= $2.oo(E). 

 0.05 



$2.00 X 2.6533 ~ $2.00 = $3.30, taxes at 2oth year. 

 $22.81 X 0.02 = $0.45, annual taxes for next 10 years. 



= $9.12 (E'} (discrepancy due to decimal values, omitted 



in text). 



$(3-30 + 9-12) 1.6289 - $9- 12 = $11-12, taxes at 3oth year. 

 $66.14 X 0.02 = $1.32, annual taxes for next 10 years. 



$(11.12 + 26.45) 1-6289 $26.45 = $34-76, taxes at 40th year. 



