604 MISC. PUBLICATION 218, U. S. DEPT. OF AGRICULTURE 
The most influential variable in the formula is the length of income 
cycle. By making the reduction factor dependent on this variable 
alone, rounded figures corresponding to length of income cycle may 
be obtained with sufficient accuracy to give the rough results sought 
by this plan. No greater precision could be expected from the use 
of reduction factors determined directly by the formula. The pre- 
cise results obtained by the formula would fit perfectly only those 
forests—if any such should exist—whose conditions were continuously 
the same as those assumed in applying the formula, and practically 
all forests would be sure to depart in some measure from the assump- 
tions. Accordingly it is proposed to apply the following reduction 
factors for given ranges of income cycles, these rates being the rounded 
figures produced by the formula: 
Reduction 
Income cycle: factor, perceng 
We tO) 4s years 0 a So See eA Tea ea gen re cr SOR et ey ee 0 
5 to OS. years yo OL NR ee Uy SESE SUNS iecet OE C9 te Be OR ee a ee 10 
1Qto: TA years ee eke 2 SOG TERRY RITE G8 AS Nee ca 20 
Lovo d Quyearsis 2 hats bee bal 4 Eten deh aE BN ay cae as bp ee 30 
20) CO 24 sy CATS a2 oa) a es ene Ae ep ee 40 
ZO YOATS ANG OVD Le. = Mier oe Ue Sia a I SS oe ae te lace 50 
As indicated above, the reduction factor for second-growth forests 
in any State would be governed only by the standard income cycle. 
This cycle should be set long enough so that it could be readily 
attained at once or within a few years over large areas of second- 
growth forest land. Its determination would be a question for the 
judgment of foresters familiar with conditions in the State in ques- 
tion. No hard and fast rules could be laid down. The actual income 
cycles found to be in most general use would carry great weight. 
Other facts which should be considered are the average age and con- 
dition of second-growth stands, rates of growth of the principal 
species, the character of local markets, and the most profitable rota- 
tions under different conditions. 
In order to reduce the chance that this plan might be used to grant 
an unjustifiably large concession to forest property, it would be 
desirable to regard 50 percent as the maximum reduction factor. 
This figure is suggested because it would correspond roughly to an 
income cycle of 25 to 30 years. If the actual cycle should be moder- 
ately longer, say 35 years, the excess burden with a 50 percent 
reduction factor would not generally be great. No differential taxa- 
tion would appear necessary in any State where the prevailing in- 
come cycle was as low as 4 years. 
The reduction factor should be subject to readjustment from time 
to time as the conditions on which its calculation had been predi- 
cated might change. It is probable that such changes would be 
necessary only at long intervals—possibly 20 years or longer. Finally, 
when sustained-yield forestry with annual or very short period 
income shall have become established as the usual practice, the 
differential taxation should be discontinued unless 1t should appear 
that such forests were entitled to consideration because of the reflec- 
tion in value of intangible benefits which would not be reached under 
an ordinary income tax. (See p. 526.) 
There is nothing to prevent, if deemed advisable, the application 
at the same time of two or more different reduction factors in a State 
which embraces distinct forest regions or distinct and readily defined 
