FIFTH NATI0NAI< CONSERVATION CONGRESS 111 



Section II. 



BASIC PRINCIPLES OF WISE FOREST TAXATION, WITH DEFINITE 

 SUGGESTION FOR LEGISLATION 



INTRODUCTION 



NEXT perhaps to war, taxation is the most powerful instrument of gov- 

 ernment, capable if unwisely used of destroying individuals, communi- 

 ties and industries. Few governmental functions are less studied by 

 the average citizen. Probably none of its branches is less understood than forest 

 taxation. Yet it is of the highest importance to all, for forest industry ranks 

 fourth in the United States and is by far our greatest manufacturing industry, 

 while every citizen is vitally interested in forest preservation from many other 

 viewpoints. It affects the holding and care of all private forests, which con- 

 stitute the great proportion, involving future and existing crops. By so doing, it 

 influences hardly less directly the success of State and Federal forestry. 



It is everywhere recognized by foresters, tax experts and political economists 

 that the general property tax applied to forests in the United States is unscien- 

 tific and discouraging to conservative management. It remains tolerable only 

 so long as good management is no object or while the tax rate or the ratio of 

 assessed to real value is extremely low. At best it is peculiarly whimsical and 

 irregular in actual practice, defeating the primary principle of its own doctrine 

 that there should be uniformity in the treatment of any given class of property. 

 Owners of forest land in different counties or States, but with similar manu- 

 facturing and market conditions, are handicapped or subsidized, as the case may 

 be, in their competition with each other. 



Disregarding for the moment the serious lack of uniformity, and, averaging 

 the tax burden upon forest land in all States, perhaps it can hardly be said that 

 it has been, up to the present time, greater than this class of property should 

 bear. It is this fact, together with a general sentiment that being presumably a 

 good speculation timber can well afford to bear a comparatively heavy share, 

 which has obscured the really important point — that whatever the general result 

 in the past, the system is rapidly approaching a point when changing conditions 

 will make it untenable. 



Timber returns no annual revenue. It is a crop to be realized only after 

 many years of outlay. But carrying costs accumulate with all the acceleration 

 of the well-known laws of compounding interest. They not only require that 

 sale value must increase rapidly to prevent actual loss, but, obviously, if the 

 period is long enough, will actually surpass any possible sale value. The period 



1911, ch. 305 (a more liberal exemption law). Laws of 1913, ch. 58 and ch. 108 (referred to 

 in the text). Maine, Laws of 1909, ch. 136 (amending Laws of 1907, ch. 169, by reducing 

 the number of trees required per acre) ; Laws of 1909, ch. 193 and 230 (providing for a 

 special tax on wild forest lands, the proceeds to be used for fire protection) . Massachusetts,* 

 Laws of 1909, ch. 187 (special exemption relating to land stocked with white pine seedlings). 



Michigan, Laws of 1911, ch. (referred to in text). New York, Laws of 1912, ch. 249, 



363, and 444 (referred to in text). North Dakota, Laws of 1909, ch. 50 (slightly amending 

 the'previbus statute). Pennsylvania, Laws of 1913, ch. 269, ch. 270, and ch. 284 (referred 

 to in the text). 



