FOREST YIELD TAXES 41 



If these conclusions are accepted one purpose of the yield tax may 

 be stated affirmatively: The yield tax should remove timber from 

 the application of the property tax and subject it to the principle of 

 the income tax, with the tax paid at the time. of harvest as nearly 

 equal to the annual property tax payments foregone as it is possible 

 to calculate it. 



The question of including minimum forestry requirements is 

 simplified somewhat if the yield-tax law contains no subsidy pro- 

 visions. The principal justification of the forestry provisions is that 

 they constitute a quid pro quo for the tax relief extended. If the 

 yield-tax principle without subsidy is accepted as the equitable man- 

 ner of taxing timber there is no tax relief for which the owner must 

 make compensation. 



There are many objections to combining forest-practice require- 

 ments with tax measures. If better forestry is required in the public 

 interest it is needed on unclassified as well as on classified lands. If 

 forest-practice regulations are to be effective they should be ad- 

 ministered by competent forestry agencies and not by local assessors, 

 town boards, or departments of revenue or taxation. And if the fear 

 of regulatory provisions keeps owners from classifying their lands 

 they are deprived of the advantages the yield tax might give them. 



No one will dispute that a principal purpose and justification of the 

 yield tax is to secure better forestry on privately owned lands. The 

 question is simply whether minimum requirements in the law are 

 necessary and whether the desired results can be achieved in other 

 and better ways. Many believe that the purpose of the yield tax can 

 be accomplished, without a specific requirement of minimum forest 

 practices, by creating a more favorable economic environment for the 

 practice of forestry. This is accomplished in two ways: by post- 

 poning the heaviest tax payments to the time when income is received 

 from forest crops, and by making one of the future costs associated 

 with forest ownership and management relatively certain. 



The yield tax alone cannot create favorable opportunities for the 

 practice of forestry on all land. It can only remove one possible 

 obstacle. In conjunction with other measures it may make forestry 

 attractive as a commercial enterprise. And if the public demands 

 a level of forestry that is not being provided voluntarily by timber 

 owners the solution would appear to be in forest practices laws that 

 apply to all owners and that are administered as separate programs. 



A second purpose of yield-tax legislation may be stated as the 

 creation of a more favorable economic environment for the practice of 

 commercial forestry. This is a limited objective but it may be a more 

 realistic one than the requirement of minimum standards of forest 

 practice. 



GENERAL REQUIREMENTS OF A GOOD LAW 



In spite of the recognized impossibility of drafting a uniform 

 yield-tax law that would be best suited to all conditions and circum- 

 stances, it is still possible to indicate in a general way the requisites 

 of a law to accomplish the purposes outlined above. 



The area covered by yield-tax laivs should be increased. — Many of 

 the yield-tax laws in effect today have been criticized because the 

 acreage of forest land classified under them is extremely small. The 



