134 REPORT OF THE FORESTRY COMMITTEE 



From a forestry standpoint so-called "home rule" in taxation, which permits 

 conflicting local policies to affect a product which has general market and compe- 

 tition, is almost always dangerous and discouraging. Forestry more than almost 

 any other industry requires stable and consistent tax treatment. 



All of these evils fall roughly under two classifications: those requiring 

 remedial legislation and those requiring better execution of laws in themselves 

 satisfactory. In both cases the need is urgent for all who are interested in forest 

 management to study the situation at home and elsewhere and to work for 

 improvement individually and collectively. It is as much forestry as is any- 

 thing else. It should be a function of forestry associations and official forestry 

 departments, which are less likely to have their motives misconstrued than are 

 forest owners, but the latter should also organize themselves, or join existing 

 taxpayers leagues, to improve conditions permanently and to forestall every 

 individual case of extravagance or injustice. 



Section III. 

 THE TAXATION OF FORESTS IN EUROPE 



THE following is a brief summary of the methods of taxing forests in the 

 principal countries of Europe, by Fred Rogers Fairchild, reprinted from 

 the report of the Special Commission on Taxation of Woodland of the 

 State of Connecticut, Hartford, 1912 : — - 



(A part of the following discussion of European forest taxation was deliv- 

 ered in an address before the Fifth Annual Forest Conference at Bretton Woods, 

 N. H., July 19, 1912.) 



The European Tax System in General. — There is a tendency among the 

 progressive states of Europe toward agreement upon the general outline of tax 

 system. As a rule the tax systems of European states are based primarily upon 

 income, rather than upon property as in the United States. The general income 

 tax is normally the basis of the system ; the tax is usually progressive, the rates 

 increasing with the size of the income. There is always a minimum income ex- 

 empt from taxation. Supplementing the income tax there is apt to be a property 

 tax, or a system of yield taxes, the purpose of which is to place an extra burden 

 of taxation on what we may call funded incomes, that is, incomes derived from 

 invested capital as distinguished from incomes due to personal service. The 

 above is, of course, a very general statement, and numerous exceptions will be 

 found. 



Forests in Europe are ordinarily subject to state taxation and to local or 

 communal taxation. As a rule, forests are subject to one or more of three im- 

 portant taxes: (1) the income tax, (2) the ground tax, and (3) the property tax. 



The Ground Tax. — The ground tax is a yield tax (Ertragssteuer). It is 

 based upon the productivity of the soil and is measured by the yield which is 

 normally to be expected in view of the general character of the soil and the use 

 to which it is devoted. It is not based upon the actual income received from 

 any particular piece of land. No account is taken of peculiarities either in the 

 management of the property or in the personal situation of the owner. Having 



