FOREST TAXATION IN THE UNITED STATES 527 
annual income, applies to all speculatively held capital, such as min- 
eral reserves and vacant city lots. The extra burden of the property 
tax, over that of an income (net-yield) tax, depresses the value of 
speculatively held land. In this way the property tax discourages 
holding land out of use, and promotes the improvement of property 
so that it will give an annual income. This result, since it operates 
as a check on speculation in vacant city real estate, is generally con- 
sidered a desirable feature of the property tax. The same is not true 
with respect to the effect of the property tax on forest land. Under 
the existing conditions, the use of forest land which is mos: desirable 
from the public viewpoint usually involves deferment of income 
through withholding virgin timber from oversupplied markets or 
through developing an adequate growing stock in second-growth 
forests. ‘The property tax, by its depressing effect on the value of 
land not yielding a current income, discourages these desirable uses 
and favors the use of land for purposes other than forestry. Accord- 
ingly, public interest may dictate relief to the growing forest to the 
extent that deferment of yield is necessary, or to the old-growth 
forest withheld from cutting, while denying corresponding relief to 
the vacant city lot. 
LIMITED BASE OF THE PROPERTY TAX 
It is common knowledge that the property tax in modern times has 
broken down as regards intangible property and many, if not most, 
forms of tangible personal property. ‘This situation is basic in all 
discussions of property tax reform. ‘There is a considerable body of 
opinion which sees in this situation an unjust discrimination against 
real property and which assumes, as an obvious corollary, that justice re- 
quires bringing under the effective operation of the property tax all forms 
of property, intangible as well as tangible, personal as well asieal. The 
investigation of the theoretical and practical aspects of this question 
does not fall within the scope of this investigation, and this topic re- 
quires only brief mention at this point. Itissufficient for the present to 
note that so far as there may be soundness in this charge against the 
property tax, forest property is a party at interest. If, because of the 
failure of the property tax to reach intangibles and many forms of 
tangible personalty, real estate is bearing a disproportionate share 
of the cost of government, then forest property is a sufferer and has 
just cause to demand relief. As a matter of fact, the case against 
the property tax as thus stated is by no means established beyond 
question. ven if it were, the possibility of remedy along the lines 
suggested is extremely limited, and the historical precedent runs all 
the other way. This aspect of the matter will be discussed briefly 
in a later section of this part. 
The limited base of the property tax is due not only to its failure 
to reach intangibles and certain forms of tangible personalty, but 
also to its failure to reach many forms of real estate. HKxemption 
from taxation of public property, the property of churches, schools, 
hospitals, burying grounds, eleemosynary and social institutions of 
various kinds, portions of the property of ex-soldiers, new industries, 
and a host of other forms of real estate, or of real estate and personalty 
mixed, has raised an acute problem in many localities. It has been 
estimated that of the 176 billion dollars worth of real estate in the 
