The Cecil Whig. [volume] (Elkton, Md.) 1841-current, 1896-03-07
ELKTON, Md, MARCH Z, 1896.
AN IMPOLITIC AND UNWISE TAX.

1t is difficult to imagine upon what
ground of justice, policy or eXpediency.
the Legislature of Maryland, has decided
to impose tax on mortgages, even in the
modified form, embraced in the Herring
amendment to the Senate Assessment Bill,
which the House of Delegates last wee
adopted by vote of sc to 10.
By this amendment, an indirect tax is to
be assessed upon all mortgages in the State.
in the shape of tax of eight per cent upon
the income, derived from them, which in
the case of mortgages bearing six per cent
interest is equivalent to tax of about one
half of one per cent.
Now the imposition of tax on mort
cages is not new question in this State.
The experiment has been tried, and found
to be oppressive and impolitc. From 1S4l
to 1874, borrowers of money upon real
estate security in Maryland, were subject to
this double tax, until it became difficult to
negotiate loan on a mortgage security,
and public sentiment in the latter year
compelled the repeal OF the law. Since that
time, the question has been discussed, pro
and con before each succeeding Legislature,
but the sentiment in favor of their taxation
has not until this time been strong enough
to formulate law providing for their taxa
tion.
Now the difficulty heretofore, and always
to be experienced in the taxation of mort
cages, is to collect such tax from the per-
son in justice and equity entitled to pay it.
The advocates OF the tax, point to the
fact, that large amounts of money invested
in mortgages annually escape taxation,
and that the State is properly entitled to
the revenue from such investments.
The argument is reasonable enough, if
a method could be devised by which the
tax can be Justly imposed upon the right
person.
Now which is the proper person to pay
this tax, the rich money lender or the poor
borrower-for the question resolves itself in
any aspect of it, into this simple inquiry.
The State Of Maryland, by legal enact
ment fixes six per cent. as the legal rate Of
interest. At this rate, the average of mort
lender always expects to net six per cent |
from his mortgage loan. In fact every
mortgage in Mary land since 1S47, contains
in addition to the usual covenant to pay
principle and interest, covenant for the
payment OF all taxes, assessments, public
dues or charges, levied or to be levied by
law, on the mortgage debt created or
secured by such mortgage.
Now under this universal covenant it is
plain, that from necessity the borrower must
assume the additional burden of taxation
whatever shape it may in law assume.
Every farmer in Maryland, whom the
exigencies of hard times or any other reason
has compelled to borrow money upon mort
gage, every moderate property owner whose
only security to borrow money on. is the
modest house or lot he owns, must perforce
pay the additional burden, not directly
assessed on him, but indirectly assessed
on him, under the present proposed
law, in the shape of sort of income
tax on the money lender, but which is
really an additional burden upon the
income of the enforced borrower. and he,
the last man able to pay such an income
tax.
Isn't it plain then, upon whom the bur
den will fall?
The State will assess the eight per cent
income mortgage tax on the money lender,
the mortgagee-and he in turn will col
lect it from the borrower-the mortgagor-
be he farmer or whom he may.
Nor can the borrower avoid the oblipa-
ton to pay this extra tax He is measur-
ably in the power OF the money lender, and
must accept his terms, which the letter of
the law allows him to impose. He must
net his six per cent and whatever extra
cost may attach to the transaction the Dor
rover must assume.
Now this being the simple condition
imposed by law upon the borrower, the
question is very proper one, right here
and now, is it right, is it just, during a
period of unparalleled business depression,
when land values were never as low, and
the incomes of our agricultural classes, and
all other business classes were never as
Ecduced--tO increase the burden Of taxatio