566 MISC. PUBLICATION 218, U. 8S. DEPT. OF AGRICULTURE 
lower than the average by efficient administration, thus enlisting the 
interest of the forest owner in the quality of local government. The 
single State rate, on the other hand, has, in addition to the adminis- 
trative advantage of simplicity, the merits of stability and territorial 
uniformity, which would be most helpful to the owner in making his 
long-range plans for the management of his property. If the single 
State rate were used, sufficient stability might be obtained by using a 
property-tax rate equal to the average total rate for all purposes 
throughout the State, excluding urban and other nonforest districts, 
and corrected so that it would be a ratio of actual rather than of as- 
sessed value. If individual county or town rates were used, the 
property-tax rates from which they were calculated should be averages 
for a period of years, perhaps for the past decade, in order to avoid 
sharp fluctuations in the yield-tax rates resulting from temporary or 
local abnormalities in the property-tax rates. Even so, there would 
still be considerable variations from year to year in each town or 
county, as well as the inevitable differences between the rates of 
different towns and counties. 
DISPOSITION OF THE REVENUE 
Since it would be essential that the State administer the yield tax 
on forest products, it is necessary to consider the disposition of the 
revenue. If a State were willing to take over support of functions to 
a degree that would render its subdivisions independent of timber 
taxes, it would be appropriate for it to retain the entire amount as 
State revenue. Such a disposition might be suitable for example in 
North Carolina, because here the State has taken over support of all 
roads and of the minimum school term. Otherwise some means of 
distribution of the yield-tax revenue would be required. There has 
been no experience adequate to serve asa guide. The following three 
alternatives have been suggested: 
1. Distribution on the basis of average annual receipts. A rough 
estimate would be made of the probable average annual yield of the 
forests in each county, town, or other district in the near future. The 
State would pay the proper share of the tax on this yield to each dis- 
trict annually and charge each such payment to an account with the 
particular district. Whenever any timber was cut in any district, 
the district’s share of the tax would be credited on its account. The 
balance at the end of each year would be carried forward with interest 
to the end of the next year. A large balance on either side would be 
avoided by changing the amount of the annual payments from time 
to time as experience showed they were too high or too low. This 
plan would give to each district the exact share to which it was 
entitled on account of timber cut within its borders, the State acting 
as a sort of banker in order to equalize the annual flow of revenue to 
the districts. 
2. Distribution in accordance with local needs. The State would 
allocate the receipts of the yield tax to school and road funds, which 
would be used to assist in supporting schools and roads in districts 
the tax revenues of which were seriously affected by removal of 
timber from the property-tax base. The exact method of arriving 
at the amounts of such aid would have to be worked out on some 
equitable basis, which would, of course, require careful study of the 
situation in the particular State. This plan is subject to the danger 
