ABSTRACT
Because of the tax-cutting mood of the general public, current interest in forest taxation by legislators is high. Many states, including Washington, Oregon, California, Montana, North Carolina, Georgia, Arkansas, and Texas, have either recently revised or are considering changing their forest taxation laws. The response from academicians, however, is mixed. Currently, the major types of taxes that can be imposed on a forest property may be divided into annual property taxes and harvest taxes. This chapter examines the economic impact of various forest taxation schemes on the optimal rotation age under the assumptions of both tax capitalization and tax shifting. General tax economists should find taxation of forest property of interest for two reasons. First, commercial forest land in private ownership comprises more than 15% of the nation's total land area. Second, the results of forest taxation studies apply readily to taxation of renewable resources in general.
