Ignorance Tax

BOBNDWOODS bobndwoods at aol.com
Fri Nov 28 23:45:12 EST 1997


In article <347CAE61.A75D62CD at lebmofo.com>, Ron Wenrich <woodtick at lebmofo.com>
writes:

>I've been struggling with why there is a difference between timber value and
>the price that landowners receive for their timber, especially after seeing
>Don and Bob go around about consulting vs industrial forestry.  Timber value
>should equal log value less logging costs less profit.  But, not all
>landowners receive that.  Is it because profit is exceedingly high?  Is it
>due to a high risk factor? Or is there something missing from the economic
>equation?

>I've come up with the Ignorance Tax to explain why there is
>a difference in timber values (or any other value, for that matter).
>The Ignorance Tax (IT) is the amount lost due to an inability or
>unwillingness to produce or market the highest value product.

>For example, loggers who buck logs incorrectly will employ the IT.
>Since their log values are less, they put the IT on the landowner.
>Mills who incorrectly cut logs will employ the IT, and push it back
>onto the loggers in lower log prices.  If there is no one to push the
>IT on, the last recipient of the IT will have to pay it. This would
>be in the form of lower earnings.

>Timber pimps, who buy timber far below the fair market value, employ a
>high IT, and often get paid by unknowing landowners.  The pimps are
>the recipients of the IT.  Timber put up for bid will have a lower IT,
>and in the case of mistakes, the IT is employed by the landowner onto
>the logger.

>The IT seems to explain all the discrepencies in timber prices.
>Therefore, timber prices =  log value less logging less profit less
>the Ignorance Tax.

>RDW

Judging by the amount of ignorance round and about, this could possibly
eliminate the National Debt.  <G>




Bob Miller
Alabama Registered Forester

~~~> The forest may be quiet, but that doesn't mean all the snakes have left.
~~~>



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