472 AMERICAN FORESTRY 



These figures do not indicate that One is to legalize the assessment of a 



growing timber is an uneconomic en- percentage of the actual sale value of 



terprise. They do indicate that through property. If this percentage is fair, 



the influence of taxes assessed annu- the results conform to those which 



ally upon property which does not of- would exist under a more theoretically 



fer an annual return, the final returns correct principle. The second is a tax 



may be largely consumed if the as- O n the expectation value of the forest, 



sessments are high. This conclusion This value is equivalent to the returns 



is recognized by every economist and which will be obtained in the future 



beyond reasonable dispute. when the t i m ber is cut discounted to 



It is only because the general prop- the pre sent time. If the net income 



erty tax on forests has not been more from the timber on a iyen lot 6Q s 



effectively administered that the results hence could be determined now as $150 



up to the present time have not been and wkh m compounded at 5 per 



more serious. It is only because the cent the e tation va i ue would be 



practice of forestry has not yet become $g 47 Thig amount on] cou]d Jn jus _ 



seriously undertaken that our tax sys- tke be taxed annuall / for the ^ ext 



tern has not been subjected to more gi Thg ob j ections to this 



hostile criticism So far we have been > * ^ J make 



busy with exploiting old forests instead ... , . . . . 



r / -ij- T^ ,, impossible of operation in this country 



of building up new ones. But the pres- *, J - , , J 



,.? s, at the present time. Timber values are 



ent conditions cannot continue. Ihe ,.1 i_ A - \A u 



r r i constantly changing and it would be im- 



practice of forestry by private owners ... ,.*>. < 



must be undertaken and it is safe to P osslble to anticipate the value at any 



say that the practice of forestry can- P e d '" *f fu f t , UI J . , f 



not be generally introduced under our The third meth d wou d P rovlde , for 



present system of taxation. lev y in S taxes wlth . a real approach to 



. , equity. It consists in a tax on the yield 



What measures can be advanced for { ^ QmG f rQm the f Qrest whenever 



the relief of growing timberlands irom . . , , 



u j r -, an income is received. Such a tax may 



the burden of unjust annual taxes i .. . , , 



,- i i i be applied to any forest, however man- 



Surely not a relief which means ex- ^ *. ' 



emption or favoritism. The most earn- a f d ' n the bas ' s ( actual returns, 



est advocate of reform in the present Tt simply means to take a certain i per- 



system does not wish for this. Exemp- c f ta S e of u the r f turn f a " d thls T sho "' d 



tion, rebate, and bounty laws to en- of cou / se be relatively large. In the 



courage reforestation have been passed cas e { our P resent iniquitous system, 



by a dozen States. There is an ex- 't has been shown possible to deprive 



emption law on the statute books of the owner through a long period of 



New Hampshire today but it is value- y ears of as much as 50 or even 75 P er 



less and ineffective. None of these cent of his final return. An income tax 



schemes touch the real problem of tax- of 20 or 25 P er cent therefore would 



ation. A reform in the method of be J ust and humane. Referring to the 



taxing forest lands must be fair to all example just given to illustrate the ex- 



and exemptions on this basis are un- pectation value method, 20 per cent of 



justified. It seems probable that any the income of $150 or $30 if taken as 



system which would be fair and just taxes, would be precisely the same as 



to all property could not be applied to a " annual tax of one per cent on the 



forests which have long enjoyed leni- expectation value of $8.47. While the 



ency in assessment and have now expectation value method is used in 



grown to maturity. In other words the parts of Europe, it is not feasible in 



problem is one of vital importance to this country. A tax on yield makes it 



young forests and those which may be unnecessary to estimate future values, 



established in the future. It does not depend on a fluctuating rate 



There are only three methods of of money value. It is in no sense 



taxation possible which will establish based on supposition or guess work 



equality among different land owners, but upon actual returns received. If 



