The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1890-11-26

Assume that your tax IS one per cent and
apply this scheme to this county and these
mortgages:
Glass 4, the small lenders, are men of
limited means. Since the tax of one per
cent would not tempt them to reduce
from seven per cent they would not get
any benefit from the law Neither would
the small borrowers who most of all need
ii.
Glass y would divide into two sub-classes
which we will call BIO and Boz. Class
BIO being the honest lenders who now re-
port themselves for taxes, might lend at
five per cent and thus give the benefit of
the law to the borrower.
Class B(b) being the lenders who dodge
their taxes and otherwise escape-as for
example those who escape by Offsets etc
would not be affected by the law, nor would
they reduce their rates. a part who now
dodge would adopt the usual methods of
states where there is usury law; they
would put it nominally at five and escape
their taxes; really they would not change
their rate at all, but make the borrower pay
the difference between five and their former
rate by commissions or other indireCtion.
In short, borrower and lender would com
bine to cheat the state of the tax,
Glasses ID and +, being the wealthy. gilt
edged lenders, would get the benefit of the
tax-eXemption as "A subsidy without cheap
ening their rates in the least by reason of it,
The state would lose its tax and the Dor
rover get no benefit
Glass c would divide like Glass b. but the
honest part would divide between them
selves and the borrowers the subsidy
equally. The state would lose its tax on
S63l9,955 Of the S6,507 ,554, collecting Sl,S75
taxes from the class who. of all Others
ought to be exempted, and losing sos, 1919 in
taxes. 1t would give as "A subsidy;
To Glass G, one h'f of s2,3l............... LIS
Ntss
To Glass 1854
Total .................. s4lO6l
1t would he cheated out of perhaps one half
of the S2O,05l in the six per cent class, which
and conspiracy ,,,,.,,.......,...; slOA75
1t would really benefit the borrowers in this
1t would be cheated in class in saGe proper,
Aud really benefit borrowers in that class,
Observation-Disclosures. ACKNOWLEDGEMENTS. 592
Total. 500 1875
In short, the state would lose 500, 1856, of
which only S1l 067 would go to favored
class of borrowers, and the rest as a subsidy
to money-lenders. AS mortgage rates de-
cline, naturally the benefit TO borrowers
would be still less.
Mr.. Winn's showing strongly substan-
tiates the position taken by the WATCH
MAN in respect of the Nichols bill
and iustities the two senators, Messrs.
Dwinell of Washington and Smith of
Windsor, who alone among the sena-
tors had the hardihood to vote against
the measure. We commend the above
facts to the attention of students of this
subject.
Every one of these plausible schemes
by mortgage exemption to tighten
the burdens of "the poor borrower"
will result in eXempting the rich money
lender from taxation. A class of bor-
rowers-which this proposed law makes
privileged class-may derive some
slight benefit, but the great burden of
taxation taken off the broad shoulders
of private or corporate bankers will be
laid on the backs of other classes, and
they must bear it, This is neither