Iron County register. [volume] (Ironton, Iron County, Mo.) 1867-1965, 1893-10-05
MORTGAGE TAXATION.
How It Act. ON the Farmer.


The taxation of mortgages is dou-
BILE taxation, and therefore unjust to
the land taxed AS the matter now
stands, a farmer with farm assessed
at 81 900 is required to pay the full tax
ON his farm, and if there is $1,000
mortgage, the holder of it is supposed
to pay tax on the mortgage. This
tax, if paid at all, though apparently
paid by the holder of the mortgage, is
in reality paid by the owner of the land
in increased interest collected from
him on the mortgage. because the own
er of the mortgage runs the risk of be-
ing taxed and will not lend unless he
is insured by extra interest against
this This is manifestly unfair. There
is no reason why property valued at
$1,000, simply because it is a farm.
should by any possibility be made to
pay tax on $4,000 of value.
AS matter of fact this attempt to
collect tax twice from the same prop
erty, keeps the rate on the land own
er's mortgage up to the top notch.
while the town collects very little taxes
it an excuse for charging high interest;
while he intends if possible to cover up
the mortgage so that it will not pay
the tax. 1.-The does not live in the Same
county he will succeed in doing this.
The smaller the community where
the mortgaged premises are situated,
the harder it is for an individual lender
to hide the mortgage, The result is
that individual lenders and executors
and trustees avoid lending on mort
cages at all, and leave the borrower at
the mercy of those who will take the
mortgages and escape taxation on
them. Consequently the latter have a
monopoly of the farm mortgages, be-
cause the owner can not borrow any
where else. Even in the cities these
lenders have great advantage, for, al
though it is less likely to be known
that an individual is lending on mort
gage, all are uneasy on the tax ques-
ton, which keeps the rate of interest
on his loan as high as possible. The
attempt to collect double tax is there
fore oppressive to the land owner,
while it does not profit the town, be-
cause the mortgages are either in the
hands of institutions exempt from tax
alton, or are covered up when owned by
individuals.
If an attempt to collect the double
tax were abandoned and mortgages
were exempted from, there would re-
suit:
1. An immediate reduction in the rate
of interest. Individual lenders could
not make the liza bility to a tax, which
generally he does not pay, an excuse
for exacting six per cent. on the mort
gage.
2. An immediate increase of lending
on mortgage. Most trustees, executors
and individuals with money to invest,
although they realize that bonds and
are unwilling to take them, because of
possible taxation. So they invest their
money out of sight Of the tax collector
in railroad or city bonds and mort
cages that pay perhaps only four-and-
a-half or even four per cent. preferring
the certainty of this return to a six per
per cent mortgage out of which per-
haps a two-and-a-haf per cent. tax
would be taken.
3. This bringing of money into the
mortgage market would relieve the
land owner from the monopoly that the
non-tax payers largely have in the
mortgage market, and would make
such competition for good mortgages
that people would take them at quite
as low a rate as they take railroad or
city bonds.
f. The bringing of more money into
the mortgage market would increase
building, would increase buying and
improving on the part of people of
small means, because they would feel
certain of accommodation in the shape
OF small loans, and would at once in
crease the taxable value of the towns
prODertv.