602 MISC. PUBLICATION 218, U. S. DEPT. OF AGRICULTURE 
it worth the effort to file an annual income statement. Under such 
conditions this plan would automatically be inoperative. 
Yield statements from small timber operators without a large re- 
serve of taxable timber would ordinarily not have to be checked, as 
the required payment (20 to 40 percent of the value of the yield) 
would easily exceed the total amount paid on their property from the 
State timber-tax fund. If such an operator admitted a yield suffi- 
ciently large to require him to make a complete payment of his de- 
ferred timber taxes, no check on the yield would be necessary further 
than what would be required in order to make the proper assessment 
under the property-tax laws. 
CONCLUSIONS 
The deferred timber tax differs from the adjusted property tax 
plan in that both the cost and responsibility for financing the plan 
would rest on the State asa whole. Under the adjusted property tax, 
the cost of the plan would be shared by the local units of covernment 
in proportion to the extent of income deferment in respect to forest 
lands within their boundaries, while the responsibility for financing 
the adjusted taxes would remain upon the owners. Accordingly the 
deferred timber tax plan is advantageous from the viewpoint of the 
holder of timber, since it would give him complete and immediate 
relief from all taxes on timber, together with the assurance that the 
amount of the tax payments due upon receipt of income would never 
exceed an amount that would be fair in comparison with the property 
taxes paid on property yielding a regular annual income held in the 
same tax district over the same period. This plan also has the ad- 
vantage of making no disturbance in local public revenues. Its dis- 
advantages consist in the necessity of State financing, which should, 
however, generally be not very burdensome, and in the administrative 
responsibility of collecting a substantial percentage of the yield until 
the deferred timber tax has in each case been paid. 
The public under this plan also shares the risk of timber destruction 
from fire and other causes to the extent that an ownership might be so 
nearly wiped out, as far as timber is concerned, that the full amount 
of the deferred property taxes imposed before the date of the loss 
would never be collected. On the other hand, the land tax, which 
should theoretically be deferred in the same manner as the timber 
tax in case of a forest property with no other prospect of income than 
from forest products, is for practical reasons collected annually, and 
this fact in a measure offsets the risk which the public would assume 
on account of possible losses. 
This plan would retain the essential advantages of the property 
tax in that the tax on the timber, while limited to a portion of the gross 
yield, would be actually fixed in total amount by the market value of 
the property and the property-tax rate during the years in which the 
income had been deferred. Thus, the amount of the tax payment 
would be determined by the fiscal needs of the government during the 
period of income deferment and would be in proportion to the tax 
burden on other property in the tax district. Furthermore any value 
due to the expectation of income from sources other than forest 
products would be automatically taxed by retaining the property tax 
on the land value, 
