Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1901-05-25
.fAXON THEM0RTGAGE
Discussed at the Taxation Con.
ference by an Expert
from St. Louis.
OF WHAT A MoRrGAGoR COMPLAINS
Present System Does Not Reach the
Troublesome Iowa Tax Dodg-
ers in Danger.

Buffalo. May 2J.-The taxation con-
ference of the National Civil Fedora
ton resumed its discussions OF the
question of taxation yesterday, the
topic being the taxation of mortgages
and inheritances and local option in
taxation. James \. Garfield, of Ohio,
presided. Frederick y. Judson. of st.
Louis. the first speaker, spoke of taxa
ton OF mortgages. JudsOn said in
part: The chaotic condition of Amer
lean taxation in the now confessed fail
ure OF the general property tax can
not be better illustrated than in the
experience OF the states. especially the
recent experiences OF California and
Missouri in the taxation of mortgaged
real estate.
Involves Double Taxation.
Lands within the limits of n state
are subject to its taxing power and
cannot escape taxation. but the mort
cages upon real estate are represented
by notes or other securities which are
subject to be listed by the holder for
taxation at his domicile. like other
personal property. This theory OF the
general property tax involves double
taxation where it is effective-that is,
the taxation of both the property and
property. But Il has failed TO be effect
i've so far as the taxation OF mortgages
il concerned. for the same reasons
that the taxation of all intangible per-
sonal property is ineffective.
MortgagoT Has To Pay the Tax
lit has been found impossible. GER
tainly I'm our cities. for the tax collec-
tor to reach mOrtgaged notes or any
personal security. and with the eNcep-
ton OF the comparatively small
amount secured from administrations
and trustees, mortgages have prac-
tically gone untaXed. The result.
therefore, is TO throw the entire bur
den upon the mortgagor. and the sense
OF injustice which he feels in being
required to pay - tax on the fun as
seSsed value of his land. when its
value to him is reduced by the amount
of the mortgage is intensified by the
recognized fact that the mortgage. as
n rule. escapes taxation"
Comes To an Inevitable Conclusion.
After discussing the experiences of
several states with various tax sys-
TENS. Judson said: The inevitable con
clusion is that land should be taxed
without reduction for mortgage liens
and that no attempt should be made
to tax mortgages. 1t is idle to at
tempt equality in taxation by Sys-
TEN which is necessarily ineffective.
The real estate owner derives benefit
from free competition OF capital. in
that he can borrow at the lowest rate
of interest. The holder OF real estate. |
certainly i'm our cites. expects to re-
ceive a normal income on his property |
after paying taxes.
Effective System IL Needed.
"But the unfortunate holder of mort !
cages or other personal securities who !
is caught by the assessor i'm the pro- |
bate court or elsewhere is from 40 TO |
GO per cent. 1t is idle TO expect that /
such tax can he collected under any |
form of self-assessment. 1t is not |
within the scope of this paper to dis
cusS how the wealth invested in per-
sOnal securities and mortgages shall |
be taxed. but certainly il should be by |
an effective system. and it should be /
the first requisite OF any rational syS-
tenn OF taxation that the assessor should |
only assess what he can see and /
Nniup"