New-York tribune., 1901-03-25
MORTGAGE TAX EXEMPTION
ASSEMBLYMAN SEYMOUR'S ARGUMENT
IN FAVOR OF 1T.
HE CoNTRovERTs THE STATEMENTS OF
SENATOR STRANAHAN. WHOSE TAXA
TION BILL IS TO BE AMENDED

Albany. March "a (SpeciaD.-There are
mors that the Stranahan -1ortgage Taxation
bill may be modified. but in what respect has
not been disclosed Senator Krum. chairman Of
the Senate Committee on Taxation and Re
trenchment. when asked if these rumors had
any basis. acknowledged that the might be
amended in some slight particulars" He de-
clined to state what these particulars were
cept TO say that there ought to be a graduated
tax upon mortgages although, he added the
worse the security, generally the higher the
rate of interest upon a mortgage which has to
be paid.
Assemblyman Seymour of New-York. has
just issued a carefully prepared statement in
favor of his bill exerlpting mortgages from
taxation. In this brief he says:
, The enormous annual loss to the borrowers of
mortgages. and the gain resulting from complete
m 16 nt % can & be shGwn How mSea
one,half of what the borrowers of the State are
on on their mortgages now because of .their general
paying y per cent more in the cities and per cent
ing than five times what the State gets in
taxes but 1t will be admitted that liability to tax
alton affects the rate least one-half of 1 per
cent.
AVERAGE RATE OF TAXATION.
The average taxation in this State is assumed to
be 2la per cent, which is about the current rate in
of cent being the additional rate of inter
laws, IT must follow that the rate of interest would
fall at least the same amount II mortgages were
accept less interest but many million dollars
would then seek mortgage investment where now
mating the mortgage Indebtedness 30 per cent of
the assessed valuation is assumed.
The total assessed value OF real estate for the
entire State is S076 0 600 while the total assessed
he a9er OF at sSE is bank
shares in the Borough of Manhattan alone. sioO-
in the rest of the state and s176OooOO mort
cages. notes, railroad bonds and all other forms
or the latter sum not more than sSS.OOOOOo is for
of the amount thl. will be stricken from the as
sessment roll Of the State If mortgages are en-
per cent. approximately s25O0O0O- In order that
mortgages '' to the amount OF s.53S ooScO are
charged at least z per cent more than they other
wise would be. This Is $l2,5oOOO. a clear loss Of
S0cO.eo above the amount received for taxes.
This immense sum OF N1.oooOoO would be gained
by the borrowers in they were compelled to
bear all the increased burden in real estate caused
share with the owners Of free and clear property.
and of personal property taxed. that they would
mortgages a net gain of s1l,coGOO.
Ihe cry Is to relieve the real estate owner Why
oo9oa aS5 S IT, ana let n'n get the Oenen' OF 'ne '
TAXING THOSE LEAST ABLE To PAY.
Senator stranahan says that his bill taxing
estate. To this would reply that this additional
tax would fall those real estate least
able TO pay. The rich, who have no mortgages,
would pay merely the ordinary tax. while the
poor who have been compelled 10 borrow in order
TO build houses, would have this additional
The Senator says that because the rate of his tax
of IA to per cent is so low the lender will be
able to shift it upon the borrower. To this I
answer that this comedies that IL is the wrong
principle. but excuses mortgage taxation the
ground that II will do no practical harm.
The Senator also says that the farmer will be
relieved from the general tax his land State
ing. 1T will be we'll bear in mind in discuss
ing the point that the borrower win pay the tax"
| would ask him how that can be. Real can
be relieved by his bill only by the exact amount
that the mortgage raises The relief OF real
estate will be measured by the receipts OF that tax
The relief. however will be distributed all real
estate. mOrtgaged or free while the tax borne by
the borrower viii fall only on the real estate
who in debt.
\ tax mortgages is always a double tax on
the owner. Probably more than One-half of the
mortgages on New-York City real estate already
contain a clause whereby they become due at the
option of the mortgage.
Our adjoining States exempt mortgages and profit
by it, The adjoining States of New-Jersey and Com
tlon and capital while New-YorlS Is suffering from
unjust discrimination Connecticut double
taxation in 1855 Rhode Island is also against such
| a principle.
Exemption OF mortgages would enormously in
| crease the amount OF available funds which would
naturally be loaned on bond and mortgages There
/ great trust funds waiting for the opportunity
taxed. The aggregate tax rolls will lose the
outside 800 100000 the personal side.
They will gain at least $50 600 the real
side