FOREST TAXATION IN THE UNITED STATES 517 
EUROPEAN EXPERIENCE AND ITS APPLICATION TO THE 
UNITED STATES 
It is evident that the tax situation in Europe has changed materially 
in recent years and that in most of the countries studied it is still 
undergoing more frequent alterations than normally occur. Every 
nation is laboring to carry a crushing load of public expenditures, and 
taxation is reacting adversely on industries of all kinds. The difficul- 
ties are aggravated by the exceptional pressure of the economic crisis, 
the effect of which was just beginning to be felt during the period when 
the field studies of European conditions were conducted. The precise 
nature of the difficulties which particularly relate to forestry vary in 
the different countries, and in general they are of a different nature 
from those encountered in the United States. 
The ordinary annual taxes in the European countries studied are 
based either on capital value or on an average or hypothetical income, 
taxes on actual income from forests not being generally employed, 
except as minor supplementary taxes or as progressive taxes on 
personal incomes. Contrary to the situation in the United States, 
these ordinary annual taxes on forests, prior to the recent economic 
crisis, were not regarded as a serious obstacle to forestry. There are 
three reasons for this favorable condition: 
(1) The forests in the countries studied are generally so organized 
and managed that income may be realized annually or at short 
intervals. This is particularly true of the large forests where the 
payment of taxes in advance of income would be most burdensome. 
(2) The methods of evaluating the tax base where real estate is 
involved are generally more favorable to forests than in the United 
States. Selling price is displaced by average money income or in- 
come capacity as the usual criterion of taxable value. There are, it 
is true, some exceptions. Where valuations are still made by local 
assessors without technical knowledge, there is complaint of inequality 
and uncertainty. As a rule, however, forests are assessed with a 
reasonable degree of accuracy according to their earning power as 
going enterprises, disregarding speculative possibilities and such value 
as may arise from prestige which their ownership confers or from any 
other satisfactions than money income. 
(3) There is relatively less dependence on annual real estate taxes 
than in the United States, and consequently the regular annual taxes 
on forest property as such have in general been at lower rates in pro- 
portion to income and value than are applied in this country. ‘There- 
fore, the effect of any tendency to discriminate against forestry as a 
land use in cases where a degree of income deferment i is necessary on 
account of the character and ownership of the forests is less serious 
than in the United States. 
As indicated before, the total weight of taxation in the European 
countries studied is anything but light. There is generally greater 
dependence than in the United States on the progressive personal 
income tax and on sales taxes. The tendency to rest heavily on these 
forms of taxation is favorable to forestry, since taxes based on net 
money income are automatically adjusted to the peculiarities of the 
forestry enterprise, and sales taxes, if applicable at all, are not burden- 
some because of the slow turn-over of capital in forestry. Heavy 
personal income taxes may have had the effect of altering or breaking 
