640 MISC. PUBLICATION 218, U. 8S. DEPT. OF AGRICULTURE 
would be prescribed by law. Forests subject to a deferment of income 
greater than normal would be obliged to bear a heavier tax burden 
than that of the income tax, but less than that of the property tax. 
On the other hand, forests which were so regulated as to receive sub- 
stantial income at shorter intervals than indicated by the standard 
income cycle would enjoy a lighter tax burden than that of the income 
tax. 
This plan would also grant differential timber taxation to old- 
growth forest properties by allowing them a graduated reduction 
factor applicable to timber of 5 percent for each year from the effec- 
tive date, with a maximum equal to the second-growth reduction 
factor. This reduction would at the outset apply only to forests 
which were completely withheld from commercial operation. After 
a transition period of at least 20 years, all old-growth forests would 
be given benefit of the same reduction factor as second-growth forests. 
In States where old-growth forests are of little importance as an 
element in the tax base, they would be treated in the same way as 
second-growth forests from the beginning. 
It is evident that the differential timber tax would offer a less 
perfect adjustment than the other recommended plans to all the 
degrees of income deferment that characterize forest properties 
within a State. While that disadvantage is recognized, this plan is 
believed to deserve favorable consideration because of its simplicity 
and the ease with which it may be added to the existing tax system. 
In brief, three plans are recommended for so modifying the property 
tax as to make it suitable to forest properties. The adjusted property 
tax involves some difficulties in application, but presents the closest 
approach to a perfect device. The deferred timber tax requires 
State financing, but offers the greatest immediate tax relief consistent 
with equitable taxation. The differential timber-tax plan is a rougher 
method for adjusting the property tax to the existing conditions of 
income deferment in forest properties but is extremely simple of 
application. 
After all is done by way of improving the operation of the property 
tax and counteracting its adverse effects upon the forests, forest taxes 
are bound to be high so long as costs of local government are high. . 
It is recommended, therefore, that the States give careful considera- 
tion to measures for reducing this cost, through reorganization of 
local governments, disorganization of local governments in sparsely 
settled areas, and control of further land settlement; through redis- 
tribution of governmental functions, analysis and coordination of gov- 
ernmental services, and their curtailment where the service appears 
not worth the cost; through improved administration of local govern- 
ment, better financial practices, State supervision and guidance, and 
more effective popular control. 
These recommendations present a program which, if adopted by the 
States, should go far to solve the forest-tax problem. Obviously this 
is not the only problem confronting American forestry. But it is a 
serious problem and one which, if not solved, will become more serious 
with time. Its solution will be an achievement worthy of the best 
efforts of the people and full of promise for the ultimate development 
of American forestry. 
