The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-05-31
DOUBLE TAXATION.

the promotion of interstate comfy in
taxation and of tax reform in general;
and to that end that a committee of fif-
teen be appointed to act as an executive
committee until another meeting of this
conference; and that the executive COM
mittee be authorized to select a general
committee of 100 with at least one mem
Der from each state; that the executive
committee be authorized to take proper
steps for the collection and dissemination
Of information in regard to state and
local taxation; that the conference
recommends to the states the recognition
and enforcement of the principles Of in
terstate comfy in taxation. These prin-
ciples require that the same property
should not be taxed at the same time by
two state Jurisdictions, and to this end
that, If the title deeds or other paper ev-
licences of the ownership of property or
of an interest in property are taxed. they
shall be taxed at the sites of the proper
ty and not elsewhere"
While these resolutions furnish NJ de-
tailed information, they furnish food f,r
thought, and If followed out will Ieal to
a solution of one of the most difficult
problems which will confront the com
mission-double taxation.
To one who has given the subject Of
taxation any considerable investigation,
tween the states has led to the greater
part Of the confusion and fraud attend
ant upon the assessment of property The
conflict of jurisdiction over property AMI
the material variance in the rate of taxa
ton has enabled the creditor c,ass to
escape taxation almost entirely, while
the weight of the burden falls upon the
debtor. Various schemes have teen at
tempted by different states to adjust this
To bring about interstate comfy of
taxation two principles should be kest
in mind by the legislatures Of the offer
ent states First, all taxes on real estate
and interests in real estate should be paid
in the locality where the property or the
security is situated; second, In all cases
of securities, the mortgagor should be as
sessed in the proportion that his mort
gage bears to the value of the incumber-
ed property.
In every city, county and state the bulk
of the amounts collected in taxes Is fer
the protection of life and property. 10
the fund necessary for the protection OF
life, every man should contribute accord
ing to his income To the expense OF
the protection of property, the property
should contribute. That is, to say,
building in st. Paul which enjoys the
protection Of the state and city should
be made to contribute to the fund for
that purpose. The man who holds a
mortgage on that building and lives in
New York should pay his proportion of
the tax to protect that property, not TO
the state of New York, but to the state
of Minnesota and to the city of St. Paul
But, under our present system, the own
er of the title must pay the tax on tie
entire assessment on the building, while
the holder of the mortgage escapes his
share of the burden. In theory the hold
er of securities must schedule them with
the assessor in the state where he re-
sides, but this is only theory-it is not
done in practice. It is safe to say that
not one dollar in hundred OF mortgage
securities is ever scheduled for assess
ment. The defense is plausible. The
holder of the mortgage says, "th, man
who owns the property on which this Is
an incumbrance has paid the full tax
for the protection Of this property. and
you have no right to collect it twi,e."
This matter was thoroughly discussed in
New York last winter, when Gov. OdelI
fathered measure to unearth the mil
liens of personal property held as Sc
curities and make it subject to state
taxation. To this end there was introduc-
ed bill providing that a cersain tax
be paid on all securities held in the state,
by aff1xing to the instrument a stamp
or stamps representing the amount of
tax due. All evidences of debt which
did not show the proper amount Of
stamps affixed and Cancelled became by
operation of law void and nen-col ectfble
80 " NSU4A0 " oASdi lIIIiS HluQSH SeCurl-
ties, there could not be a better scheme
1t made each man his own tax collector
and placed it beyond his power to de-
ceive or cheat the public The biz. how
ever, was defeated, because it meant
double taxation in all cases of real estate
security; the tax presumably having been
paid in the state where the p operty was
situated.
This difficulty has been overcome in the
states of California and Missouri by
law taxing mortgages where they are
filed of record This is the true theory
From the assessed price of the real es-
tate, the amount of the mortgage is de-
Quoted, and that amount assessed to the
holder of the mortgage. This avoids
double taxation and compels those hav-
ing an interest in property to pay their
tax where the property enjoys local pro-
lection.
The objection raised to this method is
that it will prevent the development Of
new countries by raising the rate of in
terest. This is all moonshine Every
money lender in determining his inter
est always makes allowance for the tax
on his securities at home He makes