FOREST TAXATION IN THE UNITED STATES 639 
to forests are suggested. It should be especially noted, however, 
that the adoption of any one of these plans would in no wise reduce 
the importance of those reforms in the administration of the prop- 
erty tax which have been recommended. On the other hand, any 
one of these plans may be added to the existing tax system with 
favorable results, without waiting for the accomplishment of the 
recommended reforms which are essential to a complete solution of 
the forest-tax problem. 
The first of these three recommended plans is the adjusted property 
tax. This plan would give every forest property the income from 
which is deferred for more than 1 year a tax that would be less than 
the usual property tax. The amount of the reduction would be pro- 
portional to the deferment of income. This result would be accom- 
plished by means of a deduction from assessed value that would be 
cumulative as long as income were deferred but which would be 
diminished and in the ordinary case eventually eliminated through 
the receipt of income. The amount of the deduction from assessed 
value to be accumulated in any 1 year during the periods of income 
deferment would be regulated by the assessed value of the property, 
a rate of interest fixed by law, and the taxes actually levied. 
The effect of the adjusted property tax would be to approximate 
the burden of an income (or net-yield) tax. While recognizing that 
this plan, like any practical device, necessarily falls short of perfec- 
tion, it is believed that it would come closer than any other practicable 
device to complete correction, under all conditions, of the inherent 
defects of the property tax as applied to forests. The administrative 
obstacles are readily surmountable and would diminish with general 
improvement in the administration of the property tax. 
The second of the three recommended plans would offer deferred- 
yield forests a reduction in tax burden very similar in amount to that 
provided under the adjusted property tax plan. This result would 
be accomplished by deferring all of the required property tax pay- 
ments on timber value until income was realized through the cutting 
or sale of timber and other forest products. The loss in tax revenues 
would be made good through payments from a timber-tax fund to be 
provided by the State. Upon realization of income from timber, this 
fund would be reimbursed by collecting the deferred timber taxes, 
without interest, at a rate not to exceed a fixed percentage of the 
stumpage value of the forest products cut or sold. This plan has 
the advantage of giving all the immediate tax relief granted by the 
yield-tax plan, without incurring any serious revenue difficulties. The 
net cost to the public would not be very great at the outset, and it 
would eventually be reduced through decreasing deferment of income 
from timber by wider application of sound forest management. 
The third of the three recommended plans would offer second- 
erowth forests an adjustment of the property tax to the normal 
degree of income deferment by means of differential timber taxation. 
A reduction factor, usually uniform over the State, would be applied 
to timber assessments. This factor would depend on a standard 
income cycle, representing normal deferment of income, which would 
be determined at a figure readily attainable by a large number of 
forest properties throughout the State. The reduction factor would 
be so calculated as to give forest properties which were subject to the 
standard degree of income deferment a tax burden approximately 
equal to that of an income or net-yield tax. The reduction factor 
