ABSTRACT
This chapter develops propositions concerning various kinds of forest taxes and their respective influences on economic efficiency. Previous material on the timber firm (Chapter 2) and industry (Chapter 3) is utilized in order to indicate how different kinds of taxes:
affect the allocation of productive factors within the firm;
affect the firm's supply;
affect industry supply and price;
affect the allocation of land to timber production.
Additional, and rather brief remarks, are made concerning tax induced changes in the utilization of stumpage. Because the analysis in this chapter uses two decision variables within the firm, the scope of the study is somewhat broader than selected previous publications on the subject. The results of the tax analysis are reflective of state tax policies since taxes are assumed to leave the effective rate of interest unchanged.