FOREST TAXATION IN THE UNITED STATES 599 
charged against these cut-over parcels. Ownerships differing in 
form but the same in fact would be treated as the same ownership. 
Transfer of ownership of a parcel of timber should not affect the 
tax computations so far as they pertain to the parcel transferred. 
The liability for deferred taxes would go with the parcel and have to 
be assumed by the purchaser. However, the market value of the 
parcel sold or transferred should be treated the same as gross income 
from sale of stumpage. In this way no tax advantage would be ob- 
tained by transferring to another party a parcel of timber which was 
to be cut in the near future. Upon such a transfer the payment 
would be made to the State timber-tax fund of deferred taxes on the 
remaining forest property in the ownership. This payment would 
be limited to the same extent as the payment required upon the 
harvesting of forest products. 
There is an especial danger in any plan of taxation containing 
machinery through which local governments can obtain money from 
the State. Under the deferred timber-tax plan overassessment and 
extravagant public expenditures might be encouraged in local dis- 
tricts having timber as a large part of the local tax base, since the 
receipts from the State on account of the deferred timber tax would 
be assured. To avoid such raid upon the State treasury, State super- 
vision of local expenditures and State control of property value as- 
sessments would be desirable in connection with this tax plan. Fur- 
thermore, in order to insure the full benefit of this plan to forest 
property, it is essential that in assessing forest property the assessor 
recognize the tax obligation which accrues because of payments from 
the State fund on account of deferred timber taxes. 
The administration and collection of the timber tax payable when 
yield is realized should be entirely in the hands of State officials, or 
under their strict supervision. Special measures might be required 
to guard against the escape of small operators from the payment of 
the deferred tax due. 
A large measure of State control of the administration of the 
deferred timber tax is in harmony with the earlier recommendation 
in this report of mcreased State participation in the administration 
of the property tax. 
EFFECT ON PUBLIC REVENUES 
This plan involves the transfer of the entire burden of financing 
property taxes on timber in advance of income, which has hitherto 
rested on the timber owner alone, to the taxpayers of the State at 
large. This result would be accomplished by means of the State 
timber-tax fund established and maintained by a State-wide tax. 
It will be assumed in the following discussion that this State-wide 
tax would take the form of a property tax at a uniform rate, but this 
is not an essential part of the pian, as it would be practicable, if 
desired, to use some other kind of tax. 
Table 158 is presented to indicate roughly the greatest cost to the 
property taxpayers of establishing the timber-tax fund in all of those 
States in which forest property constitutes a significant part of the 
property tax base. In preparing this table estimated market values 
were used in place of assessed or equalized values. These values, 
although secured from the best available sources, can be considered 
only as approximations. A tax rate of 2 percent on full market value 
