FOREST TAXATION 161 



But in effecting this reform the annual local revenues from 

 taxation must be maintained. Reduced revenue at present, 

 even if made up in later years, causes heavier taxation of other 

 forms of property ( 153). This is the explanation of the failure 

 of many attempts to encourage forestry by granting tax rebates 

 and exemptions, a form of privilege quickly resented and ren- 

 dered ineffectual by assessors through the simple device of 

 increasing the assessed valuation of other property belonging 

 to the beneficiary. From the facts discussed in Article 161 it 

 appears that tax reform must of necessity look to the future 

 rather than attempt to correct past errors. On this basis, the 

 problem divides itself into: 



The taxation of forest land not containing merchantable 



trees. 

 The taxation of land bearing merchantable timber. 



The efforts to secure an equitable tax on forest land devoid 

 of merchantable timber are best directed, at present, along the 

 lines discussed in Article 163. A combined land and products 

 tax best meets the needs of the situation and is most easily 

 understood. It must not be forgotten that the products tax is 

 justified only when land is not taxed at its full value, and to the 

 extent of the margin of accumulated value remaining untaxed. 



Efforts to secure this result have recently been made by several 

 states in the northeast. Connecticut permits no increase in 

 assessed value of land for fifty years and limits the tax rate to 

 10 mills. An additional income tax of 10 per cent is then assessed 

 on the stumpage value of wood products when harvested. 

 Massachusetts permits the revaluation of land exclusive of timber 

 at any time so that it is probable that the assessed value will 

 be raised to correspond closely with expectation value of the 

 bare soil. Taxes are paid annually at local rates. An income 

 tax is then levied on forest products at 6 per cent of the stump- 

 age value. This tax is equitable only in case the assessed value 

 of land will average lower than expectation value, to an extent 

 sufficient to make up the difference represented by the tax on 

 stumpage. 



Pennsylvania arbitrarily fixes the value of land at $1.00 per 



