Imágenes de páginas

are to be accepted in any serious way. The title of the address assigned emphasizes a rational system; it implies that the One now in vogue cannot be so designated, and that any system of taxation has a close relation to the Conservation of natural resources. This, if I may put it in so many words, is my thesis. It is unnecessary for me to go into the need of Conservation, since that has been done in the previous Congress and at various times in the public prints. The question then to which I must devote the time of the program assigned to me is this: How does taxation affect the Conservation of natural resources, and what suggestions of a practical nature can be made for the betterment of the taxation of such resources? It may be said in the beginning that the difficulties involved in the taxing of natural resources exist to still greater degree in the case of other property. Generally speaking, we have not attained to a rational system of taxation in any field, and we are now attempting to revamp the old system and extend it, by adding to or taking from it. Economic conditions in America have changed from time to time, and these changes have forced upon us a reorganization of our methods, not only of manufacture and of transportation, but also of administration, government, and social organization. Such a condition of affairs is seen today in nearly every State, and attempts are being made to meet it in the specific instance of the fiscal problem by adding to the old system of taxation through the special taxation of corporations, inheritances, royalties, and incomes. The consequence is that so far as natural resources are concerned we have no principle existent in the general scheme of taxation that can be used to meet the new conditions that have arisen in our efforts to conserve our resources. Just as the problems of industrial organization have come upon the States, so now has come the problem of our natural resources. In hazy thinking, and sometimes in indefinite laws, we have attempted to regulate through legislation the great corporations of the present day; and in much the same manner we shall, by feeling our way, attempt to develop some plan of taxing natural resources. Sometimes in discussing this question of the taxation of natural resources a great deal of emphasis is placed on the statement that it is the cause of the depletion of timber and mineral lands especially. I think it may be said at the outset that the taxation of natural resources is only one of many factors in the destruction of them. The extent to which this takes place is impossible to say, but the fact remains that the taxation of natural resources may or may not hasten the destruction of forest lands, the exploitation of minerals, and the cultivation of the soil. Where lands bearing timber are owned, interest charges with each year of ownership are piled up, and the same is true of the taxes. Where, on the other hand, lands are held through a royalty contract, the lessee is in a position to carry the lands without special cost to himself except that of the taxes. The consequence is that it is impossible to apply the same principle of taxation to agricultural lands, timber lands, minerals, and waterpowers. There must be a differentiation between them, and a differentiation that will clearly meet the various uses to which they are put. Without question, the general property tax, as it now stands upon the statute books of the different States, does not meet in any true sense of the term the general economic conditions, and the special needs of mining and lumbering in particular. The principle of taxing the product when it is placed upon the market applies particularly to mineral and timber lands, but the same principle in the case of agricultural lands would probably deter their use and fail to meet the needs of revenue as well as working to the discouragement of the agricultural industry. The single-taxers have insisted that the taxation of lands hastens its use, that it forces the owner to develop it; and this is just the thing that is needed in the special instances of agricultural lands and of town lots, but the same principle could not be applied to the other resources of the Nation. It is possible for the owners of timber lands by following the principles of forestry to modify the product and to keep the land in producing condition indefinitely. Taxation of such land, therefore, should have in view the maintenance of this condition. It must be clearly understood, however, that the fear of fire, interest charges on investment, and the cost of management will act quite as surely toward the rapid destruction of forests as will taxation. These conditions must also be recognized by the State in the establishment of a fire warden system, and the encouragement of forestation through some plan of bonuses. Where forestation is not practiced, the taxation of timber products under present conditions, whether on stumpage or in transit to the saw-mills, is a serious problem—serious to the local governments because under existing laws logs in transit are taxable where they are owned, and serious to the owners of the timber lands because the fixed charges on their property increase each day without any income from them. As near as can be ascertained, the annual taxes on timber vary from one cent per thousand feet to fifty. cents per thousand feet, with an average tax of somewhere in the neighborhood of fifteen cents per thousand feet. Interest charges are probably about twenty-three cents, making a total annual cost of something like thirty-eight cents per thousand feet. In ten years time the tax on each thousand feet of standing timber will amount to $1.50, which compounded with interest makes a total of $2.37. When added to the other charges it is probably true that the owner of timber under modern conditions must have at least $13.02 per thousand feet on his logs delivered at the mill if he is to come out even at the end of ten years with a profit of six percent

The suggestions which have been made from time to time regarding the taxation of timber have as their fundamental principle the separation of the value of the land from the value of the timber. This plan meets the criticism of the local assessing officers by providing a basis of taxing annually a part of the valuation, and of procuring some income for the local government. If it is understood then that the land may be taxed annually and the timber product when it is cut, we have under this plan a simple scheme of taxation which will unquestionably meet the difficulty that is now urged against the general property assessment of timber lands. Under the old plan of valueing annually the property, it was difficult to secure an appraisement that was satisfactory to anybody; and, what was more, as the years went by the local governments found their assessed values decreasing and the burden of government materially increasing with the decline in amount of standing timber. The annual taxation of the land on which the timber stands meets this difficulty, while the taxation of the product at the time of harvesting provides a plan that is fair both to the local government and to the owner of timber.

On the other hand, the taxation of mineral properties differs from the taxation of timber lands in that it is not possible for the owner to increase by any plan of Conservation the amount of tonnage that he has in his possession. The Conservation which he might practice is the simple Conservation of saving for a future time. From the point of view of the State the problem is largely one of getting a share of the value of the minerals in the ground. The method that has been generally followed is that of making an appraisement of the mineral lands, which might be very far from or very near the truth. The same principle which is applied in the case of the timber lands, namely, the taxation of the product, should be applied to the taxation of mineral properties. There is no question that the easiest way, and the most satisfactory and acceptable way to all concerned, is a tonnage tax, varying possibly with the character of the ore and the cost of mining, but always depending for the rate and the amount on the ore that has been mined. It will probably be argued, as it has in other instances, that the local governments are compelled to rely largely for their support upon the taxes paid by the owners of mineral properties, and consequently a tonnage tax would deprive them of the regularity of their income. There is much to be considered in this point; but the taxation of the surface on some such basis as that seen in the case of the timber tax would provide a regular income, which would be supplemented by the amount of the tonnage taxes.

The rate of the tonnage tax would not, as in the case of the appraisement of a general property tax, tend to hasten the utilization of the ore. That would be determined entirely by the demand for it in the fields of manufacture. The real essence of the tonnage tax lies in the fact that value found in the ground is distinctly a product of nature, which an ad valorem tax cannot recognize, and in consequence the State's right to a share of the value of the earth's products, together with the diminishing value element involved, are overlooked. The protection of the local government, and often of the mineral owner, demands a combination of the tonnage tax and of the local land tax. When we come to the taxation of water-power we are face to face with a problem that involves even more difficulties than are found in the case of the timber and mineral lands. The thing here involved is so elusive, so difficult of measurement, and requires such expensive administration, that it is quite conceivable that many years must elapse before an adequate plan for such taxation can be developed. A water-power, however, is perpetual, and in this particular it differs from timber and mineral properties, and is more akin to farm lands. It differs from the latter, however, in this particular, that the work once done in harnessing it is done once for all, and the annual labor expended upon it is not exhausted, as in the case of the farm. Nature, having been harnessed, is able to accomplish the work for which she is called upon. The first step in any adequate system of taxing water-powers must be their survey. This means listing, locating, and measuring. It means, too, that the Legislature should assume at the beginning all water-powers belonging to the State, and that the acquirement of them must be through lease, as in the case of mineral lands in the State of Minnesota, for example. Several plans have been suggested for the taxation of water-power. One is the measurement of the water flowing over a dam, and another is the taxation of the actual horsepower developed. The latter plan is subject to many criticisms. The development of horsepower depends so largely on the skill of the engineer, on the capital invested, and on the way the water is handled, that it would be far better to measure the capacity of the dam under proper engineering authority and determine a fair rate for the amount of power produced by the water passing over the dam. Of necessity many refinements of this plan would be required; such as the determination of the movement of the stream, the height of the water, the difficulties of harnessing the power; but it is possible, by taking into consideration the general expense of operating a water-power plant, to work out a rate which would be fair to the users as well as to the State. In no instance of Conservation does a greater need of proper taxation appear than in the case of water-power. Nature provides a perpetual force with but little expense after the necessary fundamentals have been arranged, and for the State to receive no compensation of any kind for the utilization of such a great wealth-producer is to bring into existence the greatest possible factor of injustice in the matter of taxation.

It will therefore be seen that a rational taxation of natural resources does not depend on any very great and intricate principle, but that, on the other hand, the principles involved are comparatively simple. It must be clearly understood as well that the taxation of land for agricultural purposes, for minerals, for timber, or for waterpower, must differ in many respects, and that a principle of taxation applied in one case may not work out in the other. But if we keep clearly in mind the purposes for which land can be utilized, and that the fundamental taxation of land as such can be made annually, and that of the product at the time of its harvesting, we have in the three instances of agricultural, mineral, and timber lands a principle that may prove satisfactory when put in the form of legislation. The same idea can be applied to the water-power site; taxation of the land at a nominal assessment and of the water-power on the basis of the amount of water passing over the dam gives us again a principle upon which can be based satisfactory legislation.

It must be remembered, however, that all legislation is compromise in character, and that the recognition of these principles has usually been set aside when it came to the question of legislation. The States have reached a point in the raising of revenue where not only more revenue is needed for the purposes of general Social advancement, but where better administration is as essential and necessary as the other. Administration bureaus must be provided in all of the States to furnish the necessary data, if we are to reach some practical basis of conserving our resources through taxation. And tax commissions must be given ample authority, and in addition must have plenty of expert advice and assistance which will give it the necessary endorsement. To my mind, a rational system of taxing natural resources depends largely on administration based upon a few fundamental principles of legislation. It is comparatively not a difficult matter; it is largely a question of willingness to meet the problem; but if the experience of the past has any light to throw upon this subject, it is very clear indeed that legislation will be slow, and that the different interests involved, through fear of some possible advantage likely to be gained over them, will cling to the old system until it is almost too late to produce any results through adequate taxation.

It is my hope that a Congress like this may have some power and

some influence in setting aside this attitude, but I fear that an adequate system of taxation will move very slowly when it comes to its formulation in legislation. This is not encouraging, but it is truth; and that after all is what we are really trying to get at without confusing the issue by arguments favoring present attitudes either of the State or of owners of natural resources. Big views will help solve the problems, little and narrow ones never. (Applause)

« AnteriorContinuar »