valuations for several classes of land are shown for northern 

 Idaho as a whole and also the tax per acre, assuming that 

 34 mills is the average tax rate in every case. 



Since the forv;st owner interested in permanent manage- 

 ment can classify his young stands under the reforestation 

 law, the higher tax for cut-over and burned land and 

 grazing land shown in table 7 is not of importance. But 

 the tax on merchantable timber of salable species cannot 

 be side-stepped or postponed, as such timber is not eligible 

 under the reforestation law. For a sample of 111 million 

 board feet of western white pine in several counties, the 

 1936 tax on land and timber combined was 8 cents per 

 thousand board feet of western white pine. Davis has 

 used an average tax ot 5 cents per thousand board feet ot 

 western white pine in his calculations.^^ Even at this 

 lower figure, one-tenth or one-eleventh of the stumpage 

 value is consumed by taxes every decade that merchant- 

 able timber is held. 



Table 7. — Average assessed valuation in northern Idaho per acre and 

 assumed average tar per acre at 34 mills^ 1^3^ 



Class of land 



Value per 

 acre ' 



Tax per 

 acre 



Timber land fincludiiiff timber) 



Cut -over and burned laud 



Dollars 

 10.12 

 2.74 

 1.00 

 .62 

 2. M 



Dollars 

 0.344 

 093 



Reforestation land . 



Wastelands _ . . 



Grazing land. _ 



034 

 .021 



.08S 



I Idaho State Board of Equalization Proceedint,?, iv'tv 



The weight of taxes on a forest owner depends largely on 

 the nature of his holdings. For example, assume that an 

 owner operating upon a 120-year rotation has 120 acres of 

 western white pine forest, 60 acres containing merchant- 

 able timber with 12 M board feet of western white pine per 

 acre, and the other 60 acres bearing younger stands in two 

 or three age groups. It he plans on operating perma- 

 nently, the 60 acres of younger stands would be classified 

 under the reforestation law, but the 60 acres of mature 

 timber would be taxed as in the past, possibly at 5 cents 

 annually for each thousand board feet of western white 

 pine. As each acre which is now bearing merchantable 

 timber is logged, that acre could be classified under the 

 reforestation law. 



In the very first year he would have a tax bill of J38.04. 

 If western white pine stumpage were $6 per thousand 

 board feet and if he logged 1 acre yearly, the tax would be 

 more than half of the gross return of $72. In the sixtieth 

 year his taxes would be ?4.6S, but during these six decades 

 the average annual tax would have been $21.34 or 30 per- 

 cent of the average annual return. In the sixty-first year 

 the first yield tax would be paid, and from then on the tax 



'^ Davis, K. P. economic management of western white pine 

 FORESTS. U. ,">. Dept. Agr. Tech. Bui. 830, 77 pp., illus. 1942. 



collector would receive $13.08 annually. Since it does not 

 immediately relieve the pressure to liquidate merchantable 

 timber, the reforestation law does nothing to encourage 

 sustained yield by the most important private forest 

 owner — the man who has the timber resource and is in a 

 position to set in motion a stable forest enterprise that 

 produces revenue from the start. 



.'^s has already been mentioned, the reforestation law 

 does not make permanent forestry very tempting even to 

 the owner with only young stands to his credit. Since 

 taxes cannot be charged off as an operating cost when there 

 is no operation, each tax dollar on immature forest repre- 

 sents an investment entitled to draw interest. A 20-year- 

 old sapling stand which will in another 100 years yield 12 M 

 board feet of western white pine will by that time have 

 acquired a tax investment under the reforestation law of 

 $20.65 an acre. .\n interest rate of 3 percent is used in 

 this calculation, which is rather low considering the fire 

 risk, .^t the time of cutting, a yield tax of $9 will be levied 

 on the basis ot $6 stumpage, and the total tax investment 

 will have amounted to 41 percent of the stumpage value. 



The Economics of Private Forest 

 O-wnership 



To the lumbermen coming into northern Idaho at the 

 beginning of the century, the virgin timber resources must 

 have appeared as a vast store of wealth awaiting conver- 

 sion into legal tender. Fresh from their successes in the 

 Lake States, with the shadow of a widely heralded national 

 timber famine sending stumpage prices continuously up- 

 ward, they must have envisioned the forests of northern 

 Idaho as an ideal field for private enterprise. The timber 

 famine, however, failed to materialize, and stumpage prices 

 did not continue to improve rapidly enough to keep ahead 

 of the steady piling up of carrying charges. Instead of 

 being able to sit back and watch their investments multiply 

 in value, they found themselves saddled with a white 

 elephant of ever-increasing costs and diminishing profits. 

 For many of these owners accelerated lumber manufac- 

 turing became the means of getting out of a bad situation. 



As early as 1913, it is said, a scattered few began to 

 recognize the nature of their dilemma and wonder whether 

 the lumber industry might have been better off if the 

 Government had held on to its forest land but sold the 

 timber currently to those wishing to engage in lumber 

 manufacturing. The quarter of a century since 1913 has 

 seen a general recognition of the fact that the field for 

 private forestry has very definite limitations. It is a 

 question today how much farther private ownership will 

 have to retreat, as it is obvious that, once logged, a great 

 share of the present private forest area will inevitably drift 

 back into one form or another of public ownership. 



Except for farm forests, the hope for permanent private 

 ownership lies principally in those areas with sufficient 



50 



