532 MISC. PUBLICATION 218, U. 8. DEPT. OF AGRICULTURE 
it happen that, through successive deaths, estate or inheritance taxes 
are exacted at comparatively close intervals, the effect upon the 
continuation of a forest enterprise may be disastrous. 
It should be noted that these results will generally occur only 
when the forest is closely held by one individual, or by a family, or 
by a small group of owners acting in close harmony. In such cir- 
cumstances, if the enterprise is unincorporated, there may be no way 
of raising the money to pay the tax except by selling a part of the 
forest. There may thus be loss from forcing the property on an 
unfavorable market, or—what is of more importance from the 
public viewpoint—the forest as a complete going enterprise may be 
dismembered. If the enterprise is incorporated, the death tax falls, 
of course, not on the corporation, but on the estate of the decedent 
stockholder. It may be necessary to sell some of the stock in order 
to pay the tax. While this may not cause a physical breaking up of 
the forest enterprise, it may result in loss of control by those who 
formerly planned and managed the enterprise and so lead to material 
change in management. Of course in the case of a forest enterprise 
that 1s incorporated with stock widely scattered, death taxes on the 
separate stockholders will generally have a negligible effect on the 
management of the property. 
In short, while death taxation does not actually impose an unrea- 
sonable burden on forest property or seriously affect the development 
of forestry in the ordinary run of cases, it does carry the potential 
power to cause dismemberment of a going forest enterprise. To 
that extent, the death taxes present a problem of real public concern. 
SEVERANCE TAXES 
The term ‘‘severance tax’’ is a collective one embracing any one 
of several types of tax applied specifically to natural resources, such 
as minerals, gas, oil, timber, and the like, at the time of their severance 
from the state of nature. Whatever the form of tax it will fall into 
one or the other and sometimes both of two general categories,namely, 
those levied, in whole or in part, in lieu of the ordinary property tax 
and those levied in addition to it. The forest-yield tax, so called, 
belongs to the first class and is elsewhere discussed in detail. Accord- 
ingly, only those of the second class, which are levied in addition to 
the property tax, need notice here. While there are several States 
which levy this kind of severance tax on their natural resources, only 
two include timber—Arkansas and Louisiana. 
The chief weakness of the severance tax as an addition to the 
property tax is that the conditions which appear to justify this form 
of taxation are not universally present, at least not in the case of 
forests. In an undeveloped region where the property tax burden is 
well under that which property in general is normally called upon to 
bear, the additional contribution of the severance tax may be reason- 
able. If the resource is being destructively exploited, regardless of 
location, this tax may be justified on the grounds that the resource is 
being removed from the property tax base and that the depletion of 
the capital automatically lightens the burden of the property tax. No 
exception to this justification seems to be called for in the case of 
timber, either old or second-growth, simply because it is a renewable 
resource. The fact that it is being cut destructively means that any 
renewal that takes place will be fortuitous and almost inevitably of 
