ABSTRACT
Current interest in the theory and application of local government taxes on forests is intense. Conflicting discussions abound in the literature, and several states have recently revised their forest tax laws or are currently considering changes. An ad valorem tax will be applied annually on a regulated forest model. Starting with no taxes, on the same type of model, a yield tax and productivity tax will then be adjusted and applied separately to raise the same annual revenue as the ad valorem tax. Since annual taxes on the model were adjusted to be equal for each tax system, the after-tax value of the entire regulated model at one point in time would be the same under each tax. Therefore, if land values differ under each system, then average investment values of immature timber must also differ, but in the opposite direction.
