The aegis & intelligencer. [volume] (Bel Air, Md.) 1864-1923, 1878-02-01
The Taxation Of Mortgages.


To the Editor Of the Ngis:
1t seems as if the subject of the taxation of
mortgages is calling forth an expression OF
views, some of which are widely different And
that public opinion, as the subject is candid '
and fairly examined, is becoming more con.
WINGED that the exemption of mortgages from tar.
alton, amounting to a very large sum in this
State, is in some degree favoring those for " HON
it was Intended, and who need protection; but
more decidedly favoring class of our wealhies,
citizens, and thereby placing an increased bur.
den upon those less able to bear it.
Every one is aware of the demands of the law
at our last assessment. With the farmer moth.
ing Was exempt from taxation. No species of
property-his lands, his household effects, his
farming implements, his live stock; and the,
upon that his building. While his neghbor, il
he should be Il wealthy lender of money, is ex.
empted from taxation on whatever amount he
has invested in mortgages. Now why should
this be? Is there no way of protecting the Dor
rover, and SO favorng unfairly the lender, but
this! 1t is argued that If mortgages are taxed
it would be double taxation on those least a bic
to pay; because the lender would require OF the
should be paid by him. This is not the State
but the lender imposing and requiring of the
borrower the payment of the taxes on his invest
ments. And if SO disposed, can he not require
bonus or something else, or an amount equal
to the tax on the mortgage?
This, we confess, is burdensome and unfair TO
pay double tax, and we say equally unfair tc
pay none at all. Thus it places an increased
burden upon others. And because this require
ment is imposed upon the borrower and has be
come usage-therefore, 1t is argued, mortgages
should be exempt from taxation, and thcreb,
all the Investments in that class of securities BY
the wealthy of the rural districts free of taxa
ton. Now is this right and proper, in view OF
the Bill of Rights connected with our State Con
stitution? "A system of equal and just taxa
ton in proportion to our ability to pay.'
Is it fulfilling its evident intention, protection
to the borrower, when money was scarce apt
not seeking investment? Now what do we see
We sec mortgages exempt from taxation-i
large investment of those most able to paw W.
see bonus often required of the borrower not
outstanding We see the protected unprotect
ed, or only partially, by this exemption: auC
we see an increased burden of taxation thereb,
falling upon the shoulders of others less able tC
bear 1t. Now let me ask, Is this working we'll
Can not our legislators in some other manner
more fair to the interest of the taXpaying com
munity, protect the interest of the borrower
and not exempt from taxation SO large an
amount of investments-the very largest p
Could the law not require upon he face Of every
mortgage the affidavit of every mortgage, be-
fore recording that investment, that he has not
directly or indirectly, required of the morlgagol
The payment of the taxes thereon, and if so, moi
to be recordedy
The law regulates the rate of interest upon
every note of hand, and although often evaded
1t does not exempt said note from taxation
But here comes the argument so often used Ii
is the argument Of those chiefly interested-the
lenders argument-the scare-crow argument
viz: "By imposinga tax on mortgages we would
drive capital from our State to seek investments
elsewhere" Now is this 80, or is it not So? Is
1t not falacl-a mistake? l would candiily
ask, is this probable to any extent? | do know
some a few years ago who sought foreign invest.
ments. Some invested in the Northern Pacific
Railroad, and some IN Missouri State Bonds
The former lost all, the latter great part They
think now that home investments under their
own supervision, are decidedly best. Capitalists
have for some time been seeking investments
permanent investments Look at Baltimore
city stock. 1t pays but 6 per cent. 1t is not as
secure as mortgages. 1t is not exempt from
taxation, and yet it is sought for at 10 and IL
per cent. above par value. Look at the per
cent: stock-4 to above par. Now, why is
this? Because money is plenty even at this rate
of interest and seeking some permanent invest
ment And every mortgagor that pays up his
interest punctually as due, need not have any
fear upon that score. This seems evident TO any
one.
No doubt this same intimidating argument
was used, and long speeches made in our halls
of legislation, when legal and fixed rate of ill.,
terest was first proposed and required. 1t was
said: at would drive capital from our midst I;
1t would take wings and fly away"
We would say, let all bear the burden of taxa
tion alike according to their ability. Let the
lender pay his tax upon his investments
in mortgages as upon other securities
and not demand it of the borrower; and let the
borrower pay his tax and be equally protected
from paying more. And If there be any exemp-
tion from taxation in the way of relief or pro-
lection, let 1t be for the benefit of the weak-not
for the strong. JUSTICE.