Effects of forest taxation and amenity preferences on nonindustrial private forest owners

Berlin

2010

S. 163-172

2 Abb., 1 Tab., 12 Lit. Ang.

Artikel aus einer ZeitschriftUnselbständiges Werk

200163864

The effects of profit and land value tax on harvesting decisions of nonindustrial private forest owners are investigated. We use a model of a utility-maximizing forest owner with amenity preferences for timber, which extends the basic two-period harvesting model to include both thinning and clear-cutting harvests. It is demonstrated that with no amenity preference, the profit and land value taxes are neutral to clear-cutting and thinning decisions. Under small to medium amenity preferences, the profit tax decreases the optimal clear-cutting volumes. However, the effect on thinning may be positive or negative, depending on the amenity preference level. The total effect of the profit tax on the short-run timber supply is negative. The effects of the land value tax contrast with those of the profit tax. Also, a tax regime with a lowered profit tax rate combined with a land value tax is analysed. It is shown to be able to bring Pareto-improvement to a regime that uses a higher profit tax but no land value tax.