518 MISC. PUBLICATION 218, U. 8. DEPT. OF AGRICULTURE 
down the management policy in the case of estates containing exten- 
sive forest areas which have in the past been managed largely for 
private pleasure parks. Otherwise they have not had any important 
adverse effect on the practice of forestry. In Great Britain the arbi- 
trary character of income tax assessments and the insignificant place 
of forests in the tax base has facilitated the adoption of measures very 
favorable to forestry. 
The problems of forest taxation which were found to be most 
troublesome in some of the European countries relate to transfer and 
inheritance taxes. The continuity of private forest management, 
never too secure for reasons outside of taxation, is threatened by the 
necessity of raising substantial sums in cash to discharge tax habilities 
arising out of transfer or inheritance of forest property. It is only 
since the World War that the rates of these taxes have been sufh- 
ciently high to create these problems, and some progress has already 
Pa made toward mitigating the severity of these taxes in respect to 
orests. 
The tax systems of the countries studied generally recognize, in one 
way or another, the public interest in the maintenance of private 
forests. In the case of property taxes, this recognition often takes the 
form of favorable rules for tax valuation. In the case of taxes based 
on somewhat arbitrarily determined bases, the regulations generally 
are at least not unfavorable to forestry, and in Great Britain they 
were found to be favorable to the point of subsidizing forest planta- 
tions. The situation in respect to transfer and inheritance taxes, as 
pointed out above, is generally adverse to forestry, but is being im- 
proved. Again the most favorable treatment is accorded in Great 
Britain where the insignificant place of forests in the tax base permits 
adjustments which could not be granted in more heavily forested 
countries without serious loss to public revenues. 
None of the special forest-tax plans commonly advocated for 
application in the United States has been tried on a substantial scale 
in Kurope. Immature-timber exemption is allowed only as a tem- 
porary and exceptional measure, as in France, for the purpose of 
encouraging the establishment of new forests. In Sweden a minor 
adjustment for the excess burden of property taxes on deferred-yield 
forests is made by means of a reduction in annual taxes in combination 
with a severance tax. This reduction in annual taxes is accom- 
plished by reducing the base for the communal income-property tax 
and certain other local taxes by lowering the assessed value of the 
erowing stock by one-third. The severance tax, by means of which 
the owners of operating properties are made to recompense the public 
for this reduction, is known as ‘‘the forest excise tax.” It is imposed 
at a rate equal to one-fourth of a 5-year average of the local income 
tax rates. In Finland there is a temporary increase in the communal 
income tax based on the stumpage value of products cut during the 
current year. Nowhere among the countries studied is yield or 
stumpage value of forest products harvested used as the principal base 
for taxation except indirectly as it affects value or average annual net 
income. So far as known, severance or yield taxes are not used as a 
major part of the tax system in any country of the world where for- 
ests are of large commercial importance. In all of the countries 
studied forests must bear substantial annual taxes regardless of when 
income is realized. 
