574 MISC. PUBLICATION 218, U. S. DEPT. OF AGRICULTURE 
tant part of the tax base, unless the change was accompanied by radical 
changes in the division of public functions between the State and 
the counties or towns or by a complicated plan of distributing the 
proceeds of the yield tax to the local governments. The practical 
difficulties that would confront the development of either of these 
remedies are extremely serious. 
The revenue difficulties that would be caused by introduction of 
the yield-tax plan have been discussed upon the assumption that the 
yield-tax rate would be fixed high enough to produce, on the average, 
a revenue approximately equivalent to what would be sacrified by 
exempting the trees from the property tax. While it is impossible 
to determine precisely what this rate would be in any State or county, 
sufficient evidence has been presented to indicate that it would gener- 
ally have to be decidedly heavy, being in many States probably far 
higher than any of the rates in existing yield-tax laws or the rates that 
have been considered in current discussion of yield-tax plans. In 
such States any yield-tax plan containing adequate rates (on this 
basis) would almost certainly encounter strenuous opposition on the 
part of timber owners, especially those engaged in present operations 
or contemplating cutting in the near future. On the other hand, a 
yield-tax plan with imadequate rates would intensify the revenue 
difficulties that have been pointed out and would in addition either 
reduce the amount of State or local revenue or else place an added 
tax burden upon other elements of the community. 
Another disadvantage of the yield-tax plan is the difficulty of 
adjusting the rate to correspond to the contributions exacted from 
owners of other real estate and to the various circumstances of differ- 
ent forest properties in the same taxing district. This is a disad- 
vantage, not only from the standpoint of a fair distribution of public 
expenditures, but also from the standpoint of public policy. Timber 
would necessarily be separated from the local property tax base. 
If the yield tax were applied at a uniform rate over the entire State, 
as administrative considerations would appear to dictate, the effect 
of expenditures in any one locality would obviously have very little 
influence on the State rate, and timber owners who had no other 
local property would be in large measure relieved from any financial 
incentive to use their influence in favor of the efficient and economical 
operation of local government. Even if the yield-tax rates were local 
and related to the local property-tax rates, this difficulty would be 
only mitigated—not removed. If the yield-tax rate were determined 
annually in relation to the property tax of the current year, it is 
evident that only those forest owners who were marketing their prod- 
uct at the time would ordinarily have any great interest in economy 
of local government. If the rate were based upon an average of 
property-tax rates over a number of past years, those owners only 
would be interested who were currently cutting or expected to cut 
within a period measured by the number of years employed in the 
calculation. Owners of immature timber would generally have no 
interest in local governmental economy, so far as their forest proper- 
ties were concerned. They might even find it to their advantage to 
encourage heavy immediate expenditures upon public works in the 
hope that less expenditure might be required at the time when they 
contemplated cutting. 
