FOREST TAXATION 163 



equalize local revenues the state shall act as banker, collecting 

 the tax, advancing funds to counties as yet undeveloped, and 

 recouping itself from counties where active logging is in process. 



In eastern states a different plan has been adopted. Logging 

 is largely in second growth and scattered, so that the problem of 

 equalizing the revenues from income is not urgent. The plan 

 is to continue the existing valuation of property containing 

 timber of taxable value, but to permit no further increase in 

 assessed valuation of this timber. When the timber is cut, 

 the property is revalued and thereafter taxed only on the value 

 of the land. In Connecticut this protection from increased 

 valuation is offset by a slight tax on yield, increasing i per cent 

 for each decade, for 50 years, so that the advantage to the owner 

 of standing timber is not very great. 



Massachusetts has adopted a plan which is worthy of special 

 mention. The land containing merchantable timber may be 

 revalued at time of classification and pays a land tax similar 

 to non-forested land. This tax is subtracted from the total 

 tax paid on the entire property previous to classification. The 

 balance is the additional amount of tax which the property 

 must continue to pay if local revenues are to be maintained. 

 This is termed the commutation tax. The amount of this tax 

 cannot be subsequently increased, by reason of increased value. 

 The principle is that the timber is exempt from annual taxation, 

 yet the property pays this commutation tax to tide over the 

 gap between the present year and the receipt of the income tax. 

 On cutting, the timber pays a 10 per cent income tax, which 

 extinguishes the commutation tax. A particularly valuable pro- 

 vision is that as soon as timber having a total value equal to 

 that of the stumpage originally assessed, has paid a products 

 tax, the timber remaining or the increase resulting from growth 

 is freed from annual taxation. The community has in the mean- 

 time suffered no loss of local revenue and is in receipt of an 

 income tax in lieu of increased taxes on advancing values. 



An additional advantage of this plan is that it permits of the 

 consolidation, for taxing purposes, of areas of any size and con- 

 dition of timber, with land bare of merchantable timber. The 



