572 MISC. PUBLICATION 218, U. 8. DEPT. OF AGRICULTURE 
if more accurate stumpage estimates were available. The determina 
tion of the average property tax rate on actual value would be in the 
hands of the State tax commission. In the absence of comprehensive 
sales data such as only a few States collect, the State tax commission 
would naturally be conservative in fiouring the ratio of assessed to 
actual value and would be likely to determine a higher ratio than the 
actual. This would raise the average property tax rate on actual 
value higher than it should be and thus give too high a yield-tax rate. 
On the other hand, the determination of stumpage values, to which 
the yield-tax rates would apply, would probably be low. Tn normal 
times the prevailing idea of stumpage values is likely to be unduly 
influenced by prices paid in large transactions, where unit values are 
low because of the long period required for orderly liquidation, and 
also by prices paid for small tracts of timber that are low because the 
tracts involved are inaccessible except to a single operator. The more 
exceptional cases, in which the timber is available for immediate 
operation and so located that there is real competition between differ- 
ent buyers, would be likely to be overlooked. These conditions seem 
to indicate the probability of a high tax rate but a low base, and it is 
impossible to predict which, in general, would be of the greater effect. 
POSSIBLE MODIFICATIONS 
A method of introducing a yield-tax plan applicable to old-growth 
as well as to second-growth timber would be to graduate both the 
exemption from the property tax and the substitution of the yield 
tax, the property tax to be eliminated over the same period that the 
yield tax was being stepped up by granting each year an exemption 
of an increasing share of the assessed value of the timber. If, for 
example, the period were 8 years, the share of the property tax on 
timber exempted each year during such transition period would be 
one-eighth times the number of years which had elapsed since the 
adoption of the plan, and the yield-tax rate each year would be one- 
eighth of the full rate times the same number of years. As a result 
the same year that the timber value became entirely exempt from the 
property tax, the full yield-tax rate would become effective. Such a 
transition period would make it easier for the sovernmental units 
affected to become adjusted to the change in public revenues. How- 
ever, this period should not be too long, on account of the extra ex- 
pense involved in collecting two different kinds of taxes on timber at 
the same time. This method of making the change is only a little 
less unfavorable to the short-term operator than a direct change all 
in 1 year. Even with graduated application of the yield-tax plan, 
the owner who had nearly completed an operation, so that his remain- 
ing timber supply must be cut within a few years, would suffer an 
increase in tax burden. The reduction in his property tax would 
fall short of equaling the new yield tax on his production. If possible 
from the fiscal viewpoint, it would be desirable to avoid a transition 
period altogether. 
In those States in which old-growth or virgin forests are a large 
element in the tax base, the difficulties inherent in applying a yield 
tax to such forests might be avoided by excluding them from the 
operation of the plan. In fact, all forests that were merchantable 
when the plan was adopted might be excluded until a given percentage 
of the stand was cut and removed. Incidentally, such a modification 
