414 MISC. PUBLICATION 218, U.S. DEPT. OF AGRICULTURE 
In Great Britain death taxes are based on the value of trees or 
timber at the time of the death of the owner and need be paid only at 
the time the timber is cut. If the tax rate is 20 percent, for example, 
the tax payable each year is 20 percent of the net receipts from stump- 
age, after deducting for management expenses subsequent to the time 
of death. As soon as the total receipts from stumpage, before deduc- 
tion of management expenses, equals the value of the timber for pro- 
bate, the death-tax obligation is discharged. If the beneficiary dies 
before that time, the unpaid balance is canceled, the timber is again 
valued and a new death tax is levied upon the new value. This 
method of collection was adopted so that the imposition of a death 
tax would not result in the destruction or overcutting of the forests 
in order to obtain funds to make payment. The result is the conver- 
sion of the death tax into a sort of yield tax. 
This plan is well suited to Great Britain, where the forests are gener- 
ally managed on a sustained-yield basis. As forests in the United 
States are not now commonly so managed, such a provision for pay- 
ment of death taxes would cause the death-tax claim to be attached 
to a great number of forests for many years without any payment. 
A modification of the British system which would be suitable to con- 
ditions in the United States will be proposed in part 12. 
After all, death taxes are ordinarily not a very important considera- 
tion in a broad view of the American forest tax problem. Death 
taxes are not levied directly upon most of the old-growth timber nor 
upon much of the second-growth. Farm wood lots and many small 
forest tracts are transferred in small estates which enjoy liberal 
exemptions. Larger timber properties are generally owned by cor- 
porations, a class of owners which is not subject to death taxes. The 
stockholders of the corporations must, of course, pay such taxes, but 
this fact does not ordinarily influence the management of the prop- 
erty. Even though a stockholder might sell a portion—or even all— 
of his stock in a forest-owning corporation in order to raise money 
to pay an inheritance or estate tax, the result would be merely to 
substitute another stockholder in his place, without any effect on the 
policy of the company. Only where a corporation was closely held 
might the situation approach that of the individual proprietorship. 
If a majority or a controlling part of the capital were owned by one 
stockholder, whose estate comprised little other wealth, payment of 
a heavy tax might lead to such sale of stock in the corporation as 
would deprive the heir of the control and so prevent, for example, the 
passing of the business on from father to son, or otherwise break the 
continuity of management. 
Another consideration which lessens the importance of death taxes 
in the whole problem of forest taxation is the fact that a very large 
estate paying death taxes at the higher rates seldom consists chiefly 
of forest property or of stock in a forest property. When there is an 
abundance of other property which might more easily be liquidated 
than the forests, there is little or no death-tax problem affecting the 
forest-growing business. 
The national committee on inheritance taxation presented to the 
National Conference on Estate and Inheritance Taxation in 1925 
certain conclusions and recommendations regarding death taxes, which 
being applicable to such taxes on all kinds of property, have more or 
less bearing upon the business of growing timber. They are pree 
