584 MISC. PUBLICATION 218, U. 8. DEPT. OF AGRICULTURE 
assessed at $1,000 (barring unknown factors, there presumably was 
an actual increase in value during 1932, which is assumed to have 
been overlooked by the assessor). The tax rate for 1933 is 2 percent. 
ee the proposed plan, the tax for 1933 would be calculated as 
ollows: 
Assessed ‘valtte;) LOSS xe Boh. 2) 2M AU REE Ea teks BANE piensa eee $1, 000. 00 
Deduction: 
Adjusted value increment of 1932: 
Interest on assessed value of 1982___________-_ $30. 00 
2 etc h atghe LO psa i es rchrar ee RN eas) PENN aU ok 25. 00 
55. 00 
Less yieldsinwl932 4225300 Rae na eee Be ees 10. 00 
Total, being the adjusted value increment accumu- 
lated throug hel Gs Ze tse oe ees cee seer ery ani 45. 00 
Adjusted: tax Daseyorrl G3 3o a. soee sexes mes set apes a caer gare 955. 00 
1933' tax-at/2'percemt=: 26 Fe Le are Tee Pe, Jeet a DOAN 19. 10 
Thus is accomplished the desired result; 1. e., exempting the forest 
from taxation on the increment of value resulting from interest 
accumulation and taxes paid, less yield realized. 
In the next year there will again be a constructive value increment, 
and thus, year after year, the adjusted value increment accumulates. 
This cumulative increment should always be exempt from taxation. 
Continuing the example through the second year, it may be assumed 
that the assessed value as of January 1, 1934, has increased to $1,100. 
The tax rate is 1.5 percent. There was no yield during 1933. The 
tax payable in 1934 is calculated as follows: 
Assessed! value, WlOG4 stash Sass eats See ee eee eee $1, 100. 00 
Deduction: i, oes 
Adjusted value increment accumulated to the beginning of 
hE Fs 3 Oia aac oe NT Petes em ges piel AR RT gel Di aU SURV Cry OY SE 45. 00 
Adjusted value increment of 1933: 
Interest on assessed value of 1933 ($1,000) _____- $30. 00 
Paxeshine LOSS 20 bs) ee Be AS 19. 10 
49. 10 
Hessvyield til O 35 ete Sle Rae Sa Ree an eaters 0. 00 
—-— 49. 10 
Total, being the adjusted value increment accumu- 
lated tothe beginning ofslO3 4s] 2 ee ae ee 94. 10 
Adjusted tax base.of 984 £4.23 Voie ee 1, 005. 90 
Tax, ne lOs4.a0 lo spercentey oye ee eee Se ee Ee eee ce 15. 09 
In case of an unanticipated fall in value, whether caused by fire, 
decline in stumpage prices, or any other cause whatever, the total 
accumulated adjusted value increment must be reduced by an amount 
_which has the same ratio to its total as the ratio of the fall in value 
to the assessed value at the beginning of the year in which the fall 
occurred. Strict theory would require that each fall in value (as well 
as each increase in value) be separately treated. In practice, how- 
ever, it would be impracticable to make adjustment for losses in value 
except in connection with the annual assessment. An unanticipated 
loss in value therefore would be assumed to have occurred whenever 
the assessed value had declined by more than the amount of the yield 
and would be measured by the amount of the decline which was in 
excess of the yield, even though this decline might have been the net 
result of a loss and a gain in the same year. The amount of the tax 
discrepancies introduced because of this departure from the theory of 
