[20 FOREST VALUATION 



2. The income tax has been recommended for forest taxation, 

 it is used abroad, it usually takes about ten per cent of net income, 

 it is simple in practice, tends to a form resembling closely the ordi- 

 nary property tax now in use. The ten per cent basis is arbitrary, 

 whether a remnant of the old "tithe" or a gradual adaptation of 

 public expense to personal income, yet it is generally agreed upon 

 as common and fair. 



How a ten per cent income tax compares to our ordinary twelve 

 per mill property tax is shown by the following figures, the basis 

 taken from circular 132, A, 1913, United States Department of 

 Agriculture. 



For the average farm of the United States the total value is 

 $6,343, the total income $980 and the net income is given at $538. 

 An income tax of ten per cent on $538 or $53 is equivalent to $8.30 

 per $1,000 of property and shows that ten per cent of net income 

 is only about 2/3 of the ordinary 12 per 1,000 rate of taxation of 

 rural property, where this is assessed at full value. Apparently this 

 was felt by rural tax officials and the assessment was adjusted to 

 make the rate reasonable, i. e., the custom of taking rural property 

 at 2/3 value brings the common, nominal twelve per mill to an 

 eight per mill on full value, or close to a ten per cent on net income 

 as above computed. 



3. From the above it follows that a ten per cent yield tax 

 which is really ten per cent on the gross income is somewhat too 

 high ; that about eight per cent of the stumpage is more nearly right 

 and that the addition of a land tax is entirely unfair. From this 

 standpoint the Pennsylvania law requiring only the ten per cent 

 yield tax is fairest; the Massachusetts law charging six per cent 

 on yield and a land tax on flat rate assessment comes next, but does 

 not work well for rotations above fifty years, and that the Connecti- 

 cut law still demands an amount of tax much greater than is paid 

 by the average farmer. 



4. Taxation and protection more than all other factors com- 

 bined decide whether forestry can and will be practiced by private 

 owners. The present methods lead to confiscation ; the recent laws 

 are a good beginning but they still demand more than is fair and 

 also lack in convenience and simplicity of application. 



From the standpoint of the state it would be of great value 

 in all forested districts to pass some simple laws, applicable to all 

 forests and framed somewhat along the lines of the Connecticut 

 law, to provide: 



a. Taxation of all woodlots as parts of occupied farms, on a 

 basis of simple assessment of the land, leaving out of consideration 



