Telegram-herald., 1889-05-23

TAAG>G MORTGAGES,
The problem of making taxation just
lnd equitable IS one Of the most diff
icult, which confronts the political
,eonOmlst. Bat discussion ehcits
ruth, and il IS encouraging 20 observe
hat the leg stature Is disposed 10 give
he subject OF the taxation OF mort
sages further consideration. While no
me can deny that there was logic IN
Governor Luce's message vetoing the
all repeating the mortgage listing law
. Is nevertheless true that, practically,
he law IS productive of harm
ather than good The suggestion
Shich the Governor made IN reference
o the exemption of mortgages in order
% be consistent. points the way TO what
would be the best practical solution of
he whole subject. That idea IS EN-
,odied IN the Randall bill proposing
he exemption of mortgages.
We are aware that howl viii i'm
nedIately be raised about the exemp-
aon of mOney-lOancrs from taxation.
rhe practical effect, however, would be
% reduce the rate OF interest on mort
ages II would deprive the money
ender of the excuse which ne now
ias for squeezing blood money!
rom the borrower, and thus help
he mortgagor instead Of the mort
yagee. The enactment of the bill
fetoed by the Governor would have
operated IN the same direction, but ii
would not have reached the bottom of
he situation. 1t does not require very
profound thought or investigation 10
'ee that by the present syst1n mort
yaged property Is subjected to a con-
siderable degree 20 double taxation.
Take an illustration similar to one
which has been used before in this
column: Two farms worth SO, 900
zach lie side by SIDE. The owner of one
has his property paid for. II the
tssessor does his duty be is
assessed for $4,000. The other
las just bought his farm. He had
)nly 5000 available to pay upon his
purchase and has gwen 4 mortgage for
5000. If the assessor does MS duty in
.hls case, as prescribed by the present
aw, he viii assess the nominal owner
IF the farm $4,000. and the man who
aolds the mortgage s.. 900, thus making
The total assessment $1,000 on the one
iarm and $4,000 on tue other; or. IN
other words, the law exscts 20 per cent.
addition % the tax because the farm Is
Affected with a mortgage.
We are aware that the illustration we
asve gwen IS an extreme one, that il
Eould, practically, BE- modified by the
act thSt farms are not assessed at
her full value; bat this IS not the
fault of the law. which demands that
sh property shall be assessed at It's real
Faiue, and the assessor who does not
seturn farm at lts fun value does not
comply with the law. But even if this
tact OF the dlsc0unting OF farm values
~ assessors = taken into account.
the fact Of double taxation Is not re-
moved. it IS only iessened in degree.
And it must be borne in mind. too. that
ihe discount on the assessment of q
farm IS not conditioned on the fact Of
the existence OF a mortgage. Two
farms Of equal value are assessed
equally, even though one may be heav-
uy mortgaged aud the other not mort
gagged az al
X such a method we're practicable
the proper remedy would be to assess
every farm at It's fun value. dividing
the assessment between the m0rtCag0r
and the mortEs gee according to the ac-
fual proprietary interest each has la the
property. But it = doubtful whether
such system V0uld bs practicable.
and since tins e the case. the assess
ment of mortgages should be abolished
and borrowers thus gwen the benefit Of
ths lower rate OF interest which would
result.