Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1881-02-02
Double Taxation OF Mortgages.

We had supposed, from reading the new
taxing law passed by the Vermont legisla-
ture, that farmers mortgage debts were
to be deducted in making up his valuation
for the listers, but correspondent of the
Burlington Free Press, who writes as though
he knew, says this is not 80. 1t indeed as
tonished us that so great reform could
have been effected so easily. Generally there
are enough influential persons interested
in perpetuating any sort of financial injus-
tice to head off anything that would give
ease to suffering debtors. This matter of the
double taxation of mortgages is now being
ventilated in the Massachusetts, legislature.
1t is not at all likely that in that state poor
mems interests will stand any chance with
the law-making power, but the following ex-
tract from the legislative correspondence OF
the Springfield Republican gives some Of the
grounds upon which the demand for a
change is based, and will interest many of
our readers " The one happening of real in
terest at the state house to-day was the con-
tinued hearing on the taxation of mortgages.
George NOVEL; of Boston opened the fire
from the camp of those who oppose the
present law with new statement of the
axioms on which their cause rests, showing
that as mortgagor grows poorer his taxes
grow heavier If he borrows sixty per cent
of his real estate he will pay four taxes,
while if he borrows ninety per cent he has
to pay nineteen taxes, or twenty-eight and
one-half per cent. Mrs Josephine r. Stone
held that state is the more prosperous as its
people hold homes of their own /; but when a
young man is not able to buy such home
out and out this state steps in to play
gouge game on what he is going to earn.
Mr.. Whitman of Haverhill put it this way
A man builds on three lots three houses, all
of equal value. A buys one of the pieces of
property for $4,000, but borrows half that
m-SlO00-of B, giving mortgage as Sc
curity. Now buys second piece of
property, mortgaging half in the same way
to B. Now b hires the third house. b
pays not cent of taxes, though he owns
$1,000 each side of him, while A and c pay
taxes to the town on twice as much as they
are worth. Robert Treat Paine, Jr., thought
the essentials on which this question hinged
to be justice and policy. Any law that taxed
one man single tax and another man a tax
and half or two taxes was intrinsically
and eternally unjust. But the policy of the
question was not to be forgotten. Mort
cages are healthy aid to industry, a mar
riage of capital and enterprise, and the law
taxing them ought to be entitled "a law to
Danish capital from Massachusetts" The
real estate must stay here; but the new,
quick capital, which moves like the wind,
whether that will stay here or not depends
on how we treat it. We want the quic k
capital of Massachusetts kept at home Just
so far as a law operates to drive capital out
of a state, it acts unwisely. Justice and
policy both concur in asking change of
the law of double taxation. England pays
bounties for ship-building some of our
states attract capital by temporarily exempt
ing it from tax. We, in Massachusetts,, have
been driving capital steadily away by taxing
mortgages. Trustees decide where TO in
vest and they put it where it pays them
best. If they can lend it here at five per
cent and pay tax, and lend it in Chicago
at five per cent without tax, they will of
course, consult their own interest. Capital
goes away easily but is hard to coax back.
Gamaliel Bradford added that the impetus
given to building by relieving mortgages
| from tax would so increase real estate that
it would not feel the added tax now paid by
| mortgagors. He submitted list of one
hundred newspapers to the committee all
in favor of the change in the law. John p.
| Treadwell of Boston held that the tax is un-
constitutional, because it is tax on no
property. You cannot increase property by
shifting titles. Two brothers may inherit
$4,000 worth Of land; if one mortgages
his half to the other, he has to pay taxes on
$4,000 instead of $5,000-all that he really
owns. If a man owes nothing, he pays one
tax if he owes as much as he owns, he pays
two taxes. The law is law of fraud, by
which the honest man pays the rasca's dues
The bulk of the mortgages in Boston to-day
are held by corporations"