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The INDEPENDENT, November 15, 2000
Delay in vote count doesn’t
hurt U.S.; panic unneeded
In spite of all the shouting, the predictions of a crip
pled presidency, the accusations and fingerpointing by
Dems and Reps, the impatience of the “important” me
dia, and the erratic performance of Wall Street, the sky
is not falling-honest.
Let the count happen. There have been problems in
completing the job, this isn’t uncommon, it’s just more
exaggerated than usual because the turnout was
heavy and the vote is closer than usual.
The U.S. Constitution clearly delineates how voting
is to be handled. As long as federal requirements have
been met, the methodology is left up to the states.
Oregon. New Mexico and, especially, Florida hâVS
all had legitimate concerns about getting the count
right, and they have all worked to do so. Now just let
Florida finish the job. We shouldn’t stop them, in fact,
no one outside the state should interfere whether we
approve of their handling or not. The Electoral College
won’t meet until mid December; why must they be
forced to either rush the count or stop the count?
There is plenty of time.
Speaking of the Electoral College, the Constitution
also specifies how a President will be chosen if there
is no clear majority. Instead of trying to get rid of the
Electoral College, we should appreciate that our
founding fathers had foresight enough to realize that a
deadlock can occur and that they developed a process
that allows for stable government even when people’s
thought processes are inflamed with partisanship.
There have been presidents who did not win the
popular vote— at least three. There have been presi
dents who were compromises because of a dead
locked Electoral College. As a nation, we have been
through it before and, guess what? We survived.
Be patient. It will be resolved and our government
will not fall.
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History needed to understand taxation
Ed. note: Upon seeing an article about the effects of
restructuring taxes on timber lands (in the Oct. 4,
2000, issue of The INDEPENDENT), Professor Emer
itus Barney Dowdle of the College of Forest Re
sources of the University of Washington, offered to
explain the history behind the changes. Following is
the article written by Professor Dowdle.
The article, “Homeowners pay for reduced
timber tax,” in the October 4 edition of The In-
depndent provided much useful information on
the impact of timber tax reform in Oregon. It pro
vided little information, howeve, on the justifica
tion for HB 3575, the legislation which initiated
the reform.
The fact that many of the reductions in tax
payments benefit large forest land owners has
led to widespread belief that a possible property
tax inequity has been legislated against home-
owners and other non-forest land property own
ers. This information is meant to clarify possible
misunderstandings on this issue. (In the inter
ests of full disclosure, I should note that I devel
oped the theoretical argument which underlies
Oregon’s forest property tax reform.)
Two issues underlie the confusion. First, the
timber industry in Oregon and elsewhere in the
West, has, in fact, been two distinctly different
industries. It began as an extractive (mining) in
dustry which was based on large inventories of
naturally-endowed “old growth” timber. Subse
quently, as old growth timber stands were de
A devastating fire on Monday destroyed the home pleted and “second growth” timber stands were
and belongings of a Vernonia family. A father, mother established on cut-over lands, the industry was
and two little girls lost everything. The family is in need transformed into an agricultural (“tree farming”)
of a place to stay, furniture, household items, clothing industry.
The appropriate means for taxing property in
- just about everything.
an extractive industry is to tax income with a
The relief effort is presently headquartered at the fire severance tax as income is received: Invento
station. For more information about what is needed ries are exempt from taxation. (Analogous con
and how to go about making donations, call Synda at cepts are “excise" and “yield” taxes, and Ore
503-429-4600, or 503-429-8252. Both of those lines gon’s “privilege” tax.) Property taxes in agricul
ar needed for business so use them as quickly as pos tural industries are levied annually on land, the
value of which is determined by the discounted
sible.
present value of net crop income. Maturing
crops are inventories of goods-in-process and
exempt from taxation.
The second issue is that the reduction (“clear
The INDEPENDENT is published on the first and
ance sale") of excessively large old growth tim
third Wednesdays of each month. There are five
ber inventories, which took place throughout
Wednesdays in November, so there will three weeks
much of the 20th century, was, expectedly, ac
companied by an upward trend in timber prices.
between this issue and the first issue in December.
This
upward trend, which began about World
Deadlines for the December 6,2000, issue will be
War II, was more or less continuous for a period
December 1 for news items and display advertising,
of approximately 40 years. Timber prices, in cur
and December 4 for classified ads.
rent dollars, increased about 75-100 times, and
Family loses everything
in fire that destroys home
?
tree farming became an economically viable in
dustry.
Prior to World War II, timber prices had been
low and relatively stable, reflecting the existence
of economically excessive timber inventories -
cleared land was often worth more than tim
bered land - and forest property was inequitably
taxed with an annual property tax on both timber
inventories and forest land. Tax payments on
many forest properties, which were not produc
ing income, were paid “out-of-pocket.”
The coincidence of low prices and faulty tax
policy created bleak expectations for invest
ments in growing timber. Incentives existed to
liquidate timber inventories and abandon cut
over lands to escape inequitable and potentially
confiscatory property taxes, and to avoid poor
investments in growing timber.
Nearly 1.5 million acres of cut-over private
timberlands were abandoned in Oregon and
Washington for these reasons. The approxi
mately 900,000 acres of forest lands managed
by the Oregon State Department of Forestry is
part of this legacy. Paradoxically, many conclud
ed that abandonment of privately-owned cut
over lands provided evidence of market failure,
and, therefore, justification for public ownership
and management of forest lands. In fact, private
land owners were reacting rationally to an irra
tional and confiscatory forest property tax. The
market didn’t fail; policy makers did, guided in
part by faulty forest tax theory.
When timber prices began their upward trend
after World War II, the adverse effects of faulty
tax policy were masked. Timber and forest land
prices and profits rose even though the industry
was paying inequitable and potentially confisca
tory property taxes. Understandably, represen
tatives of the timber industry were reluctant to
lobby for tax reform, because of public percep
tions that a profitable industry was merely seek
ing a tax break. To open this debate was to risk
getting something worse.
The general public, which is benumbed by
politicized debates over forest management and
environmental issues, largely because of exten
sive public ownership, is understandably poorly
informed about forest taxation. At minimum,
readers of The Independent should understand
that HB 3575 didn’t give the timber industry a tax
break. On the contrary, a tax inequity and a po
tential economic land mine were eliminated. The
State Legislature wisely invested in a tax reform
which is consistent with the long run health and
economic viability of one of Oregon’s most im
portant industries.