132 REPORT OF THE FORESTRY COMMITTEE 



STATE ACQUIREMENT IN IIEU OF TAXATION 



WE have hitherto discussed taxation of mature timber solely as a project 

 of tax reform. There is, however, a growing interest in the possibility 

 of affording needed tax relief on timber in return for the land after 

 the timber is removed. Many people believe reforestation must be chiefly a State 

 rather than a private function. This is undoubtedly true of land whose chief 

 value is for protection, and not for the production of commercial timber. Prob- 

 indifferent owners. State ownership of such cut-over land is often desirable, 

 ably also much land that would afford good returns under forestry will have 

 Devices for securing it without purchase, in lieu of taxes, are particularly worthy 

 of attention, if they do not seriously interfere with revenue, because they may be 

 made to insure leaving it in good condition for reforestation. 



It is hardly likely that complete State assumption of forest land for this pur- 

 pose will be practicable in States largely forested. The burden would be tre- 

 mendous for many years. Concession of taxes to the original owner would be 

 at immediate sacrifice, even if at later profit ; consequently would require bonding 

 or some other form of carrying this cost. Nevertheless a very considerable 

 engagement in forestry by the State is always desirable. 



There are various ways of accomplishing this through taxation, all based 

 on contract or classification under which, for partial or complete remission of 

 taxes, the State acquires eventual title. A somewhat different suggestion has 

 been made to tax the land annually and let the county issue timber-tax certificates, 

 bearing interest which it collects annually with the land tax, and secured as a 

 lien against the property. These certificates are to be sold to investors, who 

 receive the interest from the county. If accumulation of certificates against the 

 property approach too closely its security value should the timber be destroyed 

 accidentally, bond must be provided. 



When the owner desires to cut he must pay all accrued taxes, when release 

 will be given, but the State, at its option, may pay such indebtedness, plus the 

 assessed value of the land, and acquire ownership after cutting. The amount of 

 the timber tax is not an essential part of this plan, for it may be either the present 

 general property tax levy or an automatic stepping-up of an originally determined 

 rate such as we have discussed elsewhere. Without careful safeguard it would 

 tend to be even more excessive and unjust than under the present system. 



It is hardly within the province of this report to discuss such plans at length, 

 for they involve much else than taxation, but if adopted guardedly to prevent 

 too great State obligation they may be of high importance in settling many tax 

 problems. 



IMPROVEMENT UNDER EXISTING LAWS 



WHILE the general property tax is both theoretically and practically 

 wrong when applied to wealth which yields irregular income, and 

 especially so when the income is so long deferred as in the case of 

 timber, the degree of its injury is so variable with variations of practice as to 

 show a great field for reform within the system even when it can not be changed. 



