Woodland Taxation. 



163 



The crops on plot No. i , being annual crops and having a net 

 annual value of $io, it is clear that io% of the net product goes 

 to taxes. In the case of No. 2, which is planted to trees, 60 

 years must elapse before the harvest, and therefore 60 annual 

 payments of $1.00 each. The value of this at the end of 60 

 years is 



^ X (1.05) 60—1 = $353.58. 



Inasmuch as the whole value of the crop is but $600 at 

 that time, it follows that 59% of the entire yield is consumed in 

 taxes instead of but 10%, as should be the case to make the 

 taxes an equal burden on the production of both classes of 

 products. 



The higher the interest rate used in the computation, and 

 the longer the time taken to mature the forest crop, the more 

 startling becomes the comparison. 



The following table shows in percental values the proportion- 

 ate taxation which woodlands, yielding periodic crops, can bear 

 as compared with agricultural lands of similar net producing 

 capacity. Column i gives rotations from 40 to 100 years; col- 

 umns 2, 3, and 4 give the percentages according as money is 

 valued at 4, 5. or 6%, per annum. 



Thus, for example, with a rotation of 70 years, and money 

 worth 5%, the proper proportion for a woodland tax rate as 

 compared with the tax rate for fa.rm lands, would be 11. 9 per 

 cent, or in other terms, if the rate for the cleared lands be 15 

 mills, the rate for the woodlot should be 1.78 mills on a soil 

 value assessment. 



The finding, then, of the proportionate tax rate to be applied 

 to woodlands as compared with neighboring farm lands is a 

 purely mathematical consideration, depending wholly on (i) the 

 value of money to the landowner, and (2) the number of years 

 required to bring to maturity an ordinary crop of trees. What 

 rotation and what rate per cent, should be adopted in this prov- 

 ince in determining this proportion, admits of some discussion. 

 Five per cent, is perhaps a fair return for investment of capital 



