FOREST TAXATION IN THE UNITED STATES 67 
eG» rY 
P prr 
Y—X 
sie) 
XG ey 
Formula 10, > ee 
Since L= , therefore X= and the tax ratio, 
Annual expenses or incidental income during a rotation cause no 
changes in formula 10. Annual expenses may all be capitalized in 
(efD) feel 
p 
the term e » which must be subtracted from Y to get net 
income before taxes. ‘Therefore 
Vecpaes (acne 7] yx ERa TY 
vile Pp eee P 
of pe ada A AE EA URLS Me hte BA 
Ces?) team P 
and the tax ratio, a Oe ee 
yt Mah Bliss LT 
P 
Incidental incomes, for their part, must be added to Y, with inter- 
est, to get net income before taxes. Therefore 
eS Oe ec) eae ye) 
(1+p)"—1 p 
and the tax ratio, xX 4 
TTS ae ae 
A regeneration expense, however, does cause a change in formula 10. 
L 
It has been shown that X=rL a or in an even-aged forest 
xX =O, C’ being the cost of regeneration. By 
definition, ae 
Vene2 xX, isis) ell 
v= pes 
0 
UPD 1 
Substituting this expression for Vo, 
eas Feo rer" —o(-+p)*—1) |- 
Cross multiplying and transposing terms, 
| (p+r) X=r| Y—C-« oreo +py"—1) | or 
& | ¥—o-e SFPPS*) _,o(a +p)"=1 
jae 
Since S=Y—O—e ee, the tax ratio, 
Oormula le SS ptr Wen Ome = —] |- 
