THE PRESENT STATE OF FOREST TAX 



LEGISLATION 



BY FRED R. FAIRCHILD 

 Dept. of Economics Yale University. 



there exists a direct connec- Of course it is a matter of common 



tion between taxation and for- knowledge that the laws are not en- 



estry has been more or less gen- forced as regards the requirement of 



erally recognized for some time. The an assessment at full market value. 



exact nature of this connection, how- The tax is collected annually at what- 



ever, has never been well understood in ever rate is required to raise the neces- 



this country. Persons interested in for- sary revenue for the town, county, 



estry have seen that taxation was a State, and other public bodies depend- 



serious obstacle, and legislatures have ing upon the general property tax. 



frequently been willing to give relief by This, in brief, is the normal tax sys- 



means of special legislation affecting tern to which forests are subject in the 



the taxation of timber lands. In the United States. Only where there has 



absence of an understanding of the true been special legislation are forests 



relation between taxation and forest treated differently from other kinds of 



growing, this legislation has until very wealth. Of the forty-eight States of 



recently all gone off on the wrong track, the United States, thirty-four tax for- 



The good results hoped for have not est lands under the general property tax 



been accomplished and the problem of in exactly the same manner as other 



forest taxation is still unsolved, is in lands. 



fact more pressing than ever before. The other fourteen States have en- 



Jn what follows I shall undertake to acted special legislation affecting the 



describe briefly the present state of leg- taxation of forests. These States are 



islation in the United States affecting Maine, New Hampshire, Vermont, 



the taxation of forest lands and to show Massachusetts, Rhode Island, Connecti- 



why the special forest tax laws enacted cut, New York, Alabama, Michigan, 



up to the present have not proved ef- Wisconsin, Iowa, Nebraska, North Da- 



fective. kota, and Washington. The idea in the 



The taxation of forests is a matter of legislation of all of these States has 



State and local revenue. There is no been to encourage the planting and cul- 



taxation of forests by the national gov- tivation of trees or the general practice 



ernment. The legislation is all State of forestry by offering special induce- 



legislation. The basis of local revenue ments in the way of reduced taxation. 



everywhere in the United States and These concessions take the form of en- 



of State revenue in very many of the tire or partial exemption from taxation, 



States is the general property tax. rebates of part of the taxes, or bounties 



Everyone is familiar with the principal to be deducted from the taxes. The 



features of the general property tax. method usually employed is that of tax 



As a rule all property, real and per- exemption. The plan of a rebate is 



sonal, tangible and intangible, is sub- used in New Hampshire; North Da- 



ject'to taxation, unless specially ex- kota uses bounties. \vhiU- Wisconsin 



empted by law. Forest lands are sub- uses both exemptions and bounties. In 



ject to the tax the same as any other some of the States there are two or 



kind of wealth. The law requires that more distinct laws, not always entirely 



the actual market value shall be as- consistent with each other. In most 



sessed, which in the case of forests cases the statute is limited to planta- 



means the full value of land and trees, tions, and in five States the forest must 



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