582 MISC. PUBLICATION 218, U. S. DEPT. OF AGRICULTURE 
would be perpetuated a tax differential between owners of practically 
identical properties which would depend upon whether the time of 
depletion was just prior to or after the initial imposition of the plan. 
It is questionable whether the advantage given by the property tax 
to a forest being depleted is a sufficient inducement to cutting to 
justify the attempt to counteract it by the imposition of an additional 
tax burden at this time. Furthermore, giving effect to a negative 
deduction in the case of a property which closely approached financial 
maturity would have the same effect as changing the property tax to 
an income tax without any allowance for the fact that the property 
tax had been paid while the capital realized as income had been in 
process of accumulation. For these reasons it is considered advisable 
to limit the adjusted value increment to positive amounts, never 
permitting an increase of the ordinary property tax through applica- 
tion of a negative deduction. 
No complication is caused by unanticipated increases in the value 
of a forest, which have not entered into the calculation upon which 
the value was based. An unexpected increase in stumpage prices, 
for example, will cause an immediate increase in the present worth of 
the forest, which would theoretically be refiected in the assessed value 
at the next assessment date. Since the adjusted property tax starts 
each year with the actual assessed value, all value increases due to 
fortuitous causes are automatically made completely subject to taxa- 
tion—to the extent that the assessment is correct. 
In case of an unanticipated fall in value of the forest, however, an 
adjustment must be made. (An anticipated fall in value can be the 
result only of the receipt of income, which has been taken into ac- 
count in the adjusted value increment.) For example, whenever 
fire, wind, or insect attack causes a loss, the value of the forest is at 
once reduced. Similarly, a decrease in probable future stumpage 
prices or an increase in probable future costs causes an immediate loss 
in the value of the forest. The same result follows after any unex- 
pected event which reduces the amount of expected future incomes or 
increases the amount of expected future costs. When a forest, the 
value of which contains a value increment accumulated during some 
past years thus suffers an unanticipated loss of value, the increment 
is reduced in the same ratio as the reduction in the total value. The 
theory of the adjusted property tax is to exempt the adjusted value 
increment. From then on this forest would not, even under the 
ordinary property tax, be taxed on that part of its value increment 
which has been lost, and there is no justification for giving the owner 
any additional reduction of his taxable value on account of a value 
increment upon which he will not be assessed hereafter because it 
has ceased to exist. Of course he will continue from then on to be 
exempted on all adjusted value increments that are still present plus 
those that may accrue in the future. The theory of the adjusted 
property tax therefore requires that, following any such loss, the total 
adjusted value increment accumulated to date should be correspond- 
ingly reduced before being applied to arrive at the adjusted tax base. 
There are localities where privately owned cut-over land is not 
being reforested, either naturally or artificially, and has not increased 
in value over the past 30 or 40 years. From the viewpoint of forest- 
tax reform, there would appear to be no ground for exempting any 
part of the land value of these properties, and in case these conditions 
