Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1890-10-10
SINGLE AND DOUBLE TAXATION.
Does Our Present system of Taxation
Work any Injustice?


Work any Injustice?
To the Editor of the Free Press
Gov. Page in his excellent message, speak
ing on the subject of taxing mortgaged real
estate, calls our present system a code of
double taxation. Several of the newspapers
in the state have advanced the same idea.
IL this be true it is clear that some rem
edy should be devised, for it is both wrong
in principle and wrong in law, to impose
double tax upon the same property.
Double taxation is the taxation of the same
thing twice. The taxation of two things,
once each, is not double taxation. Under
the present system, in the case of mort
cages, theoretically the mortgagor is taxed
upon the full value of the land mortgaged
ana the mortgage upon the full amount Of
the money loaned Thus A has a farm
worth $4,000 - has cash in hand $1,000.
In this posture the law compes TO pay
taxes on $4,000 and b on $1,000. This is lair
so far. Now a borrows of b his $4,000 and
gives him his note. secured by 4 mortgage
upon his farm, for that amount. The
proposition is, to tax y for $1,000
and b for $4,000, both upon the the theory
that they are severaliy owners of the farm
in this proportion. aud each should be taxed
]
the mortgage note out OF the calculation, or
at best, treats it rs an incident Of the
mortgage, which is the result of the trans
action under the proposed change Before
the mortgage transaction. the government
had grand list against \ of $1,000 and
against b Of $1,000 In all $1,000. After
the NOR gage transaction it has list
against \ Oh $1,000 ard of B of $1,000.
Thus it loses $4,000 in t., list. Ought the
parties by a mere contract between them
selves, to be able for their own advantage to
withdraw from The burden of taxation two
,eveuths Of their grand list, when between
th=m they have the same amount of prop
erty as before Ought the government to
lose lis grip upon the 5000 for taxation
This is u serious question TO all the other
people in the State. \ very large per cent
of the real estate iu Vermont is mortgaged.
In the same proportion as YOU reduce the
taxable estate of one taxpayer, by
the same ratio YOU increase the
per cent of taSqtion Of his neighbor a
and + are not alone interested in the public
aspects of the mortgage transaction.
and d may say to them, trade your pro
pcrty between yourselves as you please, but
as long as you keep the same property in
existence it must somehow help us IN sup
porting the government as before. After
the mort gage Transaction b has note for
-, eco with Eilt-cdLo security which he can
gct ca,hed al the bank any day me pleases
tie has the same value in his hands rs be
fore lie parted with his money 1t is ever
better. 1t is earning income. Why should
ue not pay taxes upon bis note as a note
Just as he did ON his money before he tool
a note in place of it and to represent it.
After the mortgage transaction \ has hi.
farm with all the rents. profits, use aud in
come thercof-aIl the benefits it could con
fer whether mortgagod or not-and beside
this has - 900 IN money. lie owes !
- 600 and his farm is pledge,
Tor that amount. But he ha
the s.. OO6 borrowed He cal
clear his farm the next day with this sam
money or he can keep it, put it AT interes
or otherwise MAKE it yield income 50 tina
In the end it viii like a sinking fund NEE
and cxtngu.sh B's note and clear the farm
II ! has only an interest of $4,000 in tn
farm after the mort gage, no has $4,000 il
money which gives aim $1,000 of taXabl
estate as he had TO start with Why shoul,
he not pay taxes either upon his farm rs
farm upon valuation of $4,000 or upo
$1,000 in the farm and $1,000 in money o
I its euuivalent--ln either event to the sam
extent a before
Is our present system case Of tn
J double taxation of the same thing or of tn
f single taxation of two distinct things
In the case Of n purchase money mort
gage there is an apparent increase Of tax
able property, but this is easily justified
The question now submitted is in the SUI
posed case does our present system c
e taxation work any injustice.
t INQUIRER.