Clarke courier. [volume] (Berryville, Va.) 1869-1997, 1901-10-16
A TAXDECIsION INKENTUCKY

NNiNSNAhS w NuS AiutCc, &c IL cobdo-
fishes principle of taxation which
we have been declaring day in and
day out In these columns for some
time past. The direction In brief
is that bonds given bv the Frankfort
Water Company and held by non res
ident owners could not be taxed by
the city of Frankfort, as the State
had never exercised its powers to
assess such mortgages.
The Louisville Courier Journal in
commenting on the decision says
that II was not only in accordance
with the law, but also with common
honesty and good business policy.
The city of Frankfort and the State
of Kentucky were not deprived of
any revenue by it for the reason that
the property on which the bonds
were issued is already taxed aud that
taxation of both the property and
the evidence of debt upon that prop
erty would be double taxation in its
most harmful form. at would be
inequitable," continues the Courier
Journal, because the general theory
of taxation is to lay but one tax on
any given property"
That is only another way of saying
what we have been saving, that all
property should be taxed once, but
only once. 1t is not right, it is not
equitable, it is little short of a pub
lie outrage for the State to tax upon
fair valuation any given property
and then tax also mortgage in any
form upon the property. 1t is like
taxing both the substance and the
shadow. No property created when
"a debt is created, for every body
knows that debt is not property.
Proceeding, the Courier Journal
says that such course would also be
harmful because it would drive cap
ital from the State: that it would be
possible for the State or city to com
/ pei payments upon such mortgages
by collecting the tax from the gIyer
of the obi cation, but the result would
ultimately be to impose double tax
upon the borrower. And SO our con-
temporary concludes that capital
which taxed at home will not submit
to being taxed again where it is
loan and by no possible legislation
can il be made to do SO. 1t would
simply be withdrawn from the in
'estment and placed elsewhere. In
illustration of this the Courier-Jour-
nal says that Missouri recently had u
Legislature which held that the
heavy loans of foreign capital in the
State ought to be taxed and passed a
bill in accordance with the taxation
of mortgages. The result was
prompt advance in the interest rate
on real estate loans from ) to Z per
cent and the immediate withdrawal
of many insurance companies and
other large lenders from the State.
n test case was finally made and
taken before Supreme Court of Mis-
souri,, and the court declared that
the law was unconstitutional AS ire
suit of this decision the Courier.
Journal says that again these large
lenders are making five per cent loans
in Missouri.
AS another illustration, our Louis
Vile contemporary points out that
recently an attempt was made to tax
real estate mortgages in Clark county,
Kentucky. The result was that
Western insurance company, which
had loaned several million dollars in
Kentucky at four and five per cent,
at once directed its loan agent to
lend no more and to quit the State
If the attempt should be successful.
But in this case the lower court held |
that the law did not authorize the as
sessment of mortgages in the hands
of non residents, and so, the Courier
Journal adds this cheap money is
once more at the command of Ken
lucky borrowers.
The borrowers always pays the tax
on the mortgage. The only relief to
him is in exempting the mortgage, |
and so giving him the opportunity to
borrow money at lower rate of in
terest. We believe that one of the |
best things that the Constitutional
COnVan fiop oOnld do For tba Cto4o e /