New-York tribune., 1901-03-25
TIE MORTGAGE TAX BILL.
MR.. cLARKE's CONTENTION THAT 1T
WILL IMPOSE NO ADDITIONAL BUR
DEN UPON LAND OWNERS
the Editor OF The Tribune

To the Editor OF The Tribune
Sir: My reasons for supporting the Suanahan
Mortgage Tax bin as follows: First, because II
will do away with the abominable iniquity OF the
present general property tax, which, as II affects
MORTGAGES produces very little revenue. but in
the case Of the few mortgages that are caught
eats up from 20 TO 60 cent Of the income; sec
ond, because il distributes the direct burden OF
taxation more fairly and justly by requiring mort
eaeees and lenders face the peremptory ana
drastic remedies which il Is necessary that the
State should have 10 enforce the collection of
leaving them rely for recOuping themselves. as
farmers and land owners must rely upon the milder
remedies 20 which the contracts that they are
able 10 make with other people may entitle them.
and by relieving Ia I'D owners mortgageors and bor-
rowers from this a corresponding extent;
third because Il will minimize and If the yield
OF revenue is large enough will abolish altogether
the general property for State purposes and so
do away with the evils arising from the necessity
of equalizng assessments between counties. and
finally. because it is feasible. while counter
woposition promising the equivalent ben
Sits appears be
The most common objection the bill is that IT
viii impose an additional burden upon land owners
The reasons given for this belief are not tenable.
il Is probably true that in the long run and on
the average, the amount OF which lenders are
compelled TO pay must under contract with the
borrowers, be refunded; otherwise there would not
be any adequate motive for making loans. But the
cages II caught. subject under the present
law unQuestionably tends to keep capital OF
mortgage Investments, and so affects the interest
rate I'm some degree. Many experts testified before
the joint Committee Taxation last year, and
their unanimous opinion that this liability to
the general tax makes the interest rate at least
one-half of ! per higher than il would he II
there were no mortgage tax. II this is so. II is
plain that Mr.. Stranahan's tax of one-half Of
per cent mortgage debts, with his exemption
~n,sg
least. any additional burden upon land owners; it
would merely turn into the public treasury money
which goes INTO the pockets Of lenders as COM
pensation for risk.
The Tribune in some of its comments to
think thRt the viii be enforced by levy
upon the land owners interest in the land This is
q mistake. The Will be levied only upon the
debt and the mortgage security therefor, and the
purchaser at the tax sale will get title except
such as he would have in case OF voluntary as
signment of the debt or mortgage made by the
mortgage lender The interests of land owners
would not be affected any more than they are now
every day. by voluntary assignments. There would
be substitution OF creditors, and nothing more
IL is said that really there is nothing Whlch can
be taxed except the mortgaged property. Thus
The Tribune. supposng the case OF young man
a, going TO farming, VINO mas S9oU ana wlshes 70
buy farm worth $4,000. and who for that purpose
oniy $1,000 worth of property there to be taxed and
that all the property appertaining 10 both the mort
goes. is in The land. This is manifest error. The
transaction dscloses the existence or another tund
namely the $500 loaned. which. In Bs hands be-
fore the loan. identifable and in all prob
ability wholly escaped taxation. The making ana
recording OF the mortgage prove the existence or
the fund and enable the State to identity and seize
st. if it were tangible thing This fund is rep
resented. primarily by the land or by the
mortgage, but by the debt which b can compel A
TO satisfy merely of the land but out of
any other property which A owns or may acquire
in the future. AS earning power is an asset, and
the right appropriate his earnings, which the
contract gives 10 b. is itself property Plainly, In
the supposed there is than oooe worth of
property in sight.
There win be no double taxation, in the proper
and accurate of the words; that is TO the
tax, for the same purpose viii not hit any
person property twice. In loose and inconse-
quental sense there may be double taxation but If
this is obje rton TO the Stranahan BILL IL Is a
stll greater objection to the present tax system.
The general property to-day in effect in New
York City. and in reality elsewhere, is series OF
.sor different purposes (school tax, highway tax
town, city village tax. county tax, state tax
etc) and for each of these different taxes the
nortgageor's and mortgages interests IN real
estate are liable. II the Stranahan bill becomes
law and produces the necessary amount OF revenue
the mortgageors irxerest in land viii longer be
liable taxation for State purposes, and TO that
extent the duplicity Of the present system Will
be diminished.
II is said that broad economic grounds the
best policy. This may be true. but. although IT
be true. there is further question Is the time
ripe for embodying such a policy in law? am
assured by competent judges that IL cannot be
done the present condition of sentiment through
out the State. Pressure for total exemption, while
ever, result a continuation Of the deploraol
conditions which now exist Would not tlrat be a
pity? ;. B. CLARhE