FOREST TAXATION IN THE UNITED STATES 567 
of controversy over the definite guides for use of these funds, and 
political considerations would be likely to enter. It might also have 
a tendency to perpetuate uneconomic local units. 
3. Distribution in proportion to forest value. The yield-tax 
receipts would be divided annually in proportion to forest value on the 
basis of an impartial periodic appraisal of forest property in the 
several counties or other districts. If land were retained under the 
property tax, the land value should be excluded from the appraisal. 
This plan involves the difficult and expensive administrative task of 
making the appraisals. 
EFFECT ON PUBLIC REVENUES 
The initial effect on public revenues of the modified yield-tax plan 
would depend primarily on the ratio of the value of the current an- 
nual cut to the total value of the standing timber, exclusive of tax- 
exempt property, compared with the reciprocal of the ratio of the 
yield-tax rate to the property tax rate. If, for example, a yield tax 
were applied at a rate 10 times the property tax rate, the value of 
the annual cut to which the yield tax was applied would have to be 
one-tenth of the total value of taxable standing timber in order to 
produce an equal revenue. If under these conditions the value of 
the annual cut were less than one-tenth of the total value of the tim- 
ber, the application of the yield tax would result in a deficit in public 
revenues compared with the property tax; if more than one-tenth, a 
surplus. | 
The approximate ratios, based on the average cut and value for 
the years 1925-29, are given in table 152 for all of the States where 
reasonably satisfactory figures are available. As the estimates from 
which these ratios are computed are in some respects very rough, no 
claim is made for accuracy as to the results. However some indica- 
tion is given by this table of the immediate effect on the total tax 
‘revenues of any particular yield-tax rate. For example, if the yield- 
tax rate were 10 times the property tax rate, 24 out of 39 States would 
show a gain in tax revenues through the substitution of the yield tax 
for the property tax, and 15 States would show a loss, in all cases 
considering the State as a whole. In many of the States where there 
might be considerable proportionate loss in tax revenues from timber, 
the value of timber is not a sufficiently large item in the tax base to 
make the loss serious. This condition exists in all of the Middle 
Atlantic States and in Montana, Colorado, and California. It appears 
that in normal years the revenue loss on a State-wide basis resulting 
from the adoption of the yield-tax plan at a rate of about 10 or 12 
times the property tax rate would not be important except in a few 
States where the annual cut is unusually small relative to the supply 
of standing timber and standing timber is a large element in the tax 
base, as in Maine, Vermont, Idaho, and Oregon. 
