The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1902-01-10

that no law can be enacted which will
control the owners of money in the selec-
ton Of a market for it. Like every other
commodity, it will seek the most favorable
market. 60 IL SIJ Is Eus~4%ss. as $50
Low rates Of interest ON mortgage loans
can never exist where sthe loan itself is
taxed The state which seeks to tax the
mortgage must expect one of two results
to follow: Q) increased rates of interest
or (2) evasion. Moreover, the enforce
ment of such a law results in discrlmlna-
ton against the citizens of the state in
which it is enforced. The commission
visited cities in this state where the ag-
gregate rate Of taxation was per cent.
It would clearly be impossible for bor-
rover to secure loan on property in
such town at 6 per cent if the lender
was required to pay upon the loan a
tax of 5 per cent. The fact that mortgage
loans are being made on property so
situated is demonstration that the law
is as to them imperative.
When state begins to tax credits there
is no logical halting place until all forms
of credit are reached If the loan secured
by mortgage is taxed, so must be the one
which is not secured. If the loan evil
denced by written promise is to be taxed
so must be the one resting only on a
verbal promise. AS no system Of taxation
could ever become efficient enough to
reach the greater volume of credits, it is
clear that it's attempted enforcement must
always be attended with great injustice
The commission is, after careful con-
sideration, firmly Of the opinion that the
early abandonment of the present policy
of taxing credits would be wise as the
revenue derived therefrom is, and will
remain, too inconsiderable to cOunterbal-
ance the injustice and immortality incident
to such measures If it be found that
public sentiment will not at present sus-
tain so radical a change in the revenue
policy of the state, then some method for
the taxation OF credits, less unjust than
the one now existing, should be adopted.
It was proposed at the last session OF
| the legislature of the state of New York
| to impose upon mortgages a fiat rate of 5
| mills on the dollar, and a bill for that
purpose was there introduced which, al
though failing to become a law, received
strong support.
Recent .advices Indicate that the effort
| to secure such legislation in that state
! has not yet been abandoned. Governor
| Odell has lately called attention to the
| subject in strong words Of approval, and
he will undoubtedly endeavor to secure
the introduction and passage at an early
| day of measure similar in terms to the
| one which was defeated.
| While of the opinion that it is unwise
| for this state to continue the policy OF
taxing mortgages and similar species OF
property, the commission was, in view OF
our constitution, unable to provide for
their exemption, either in whole or in
| part.
No marked reform in the taxation OF
personal property can be effected until the
I Legislature is afforded greater freedom OF
action in the matter of legislating upon
! the subject.
| To the objection that by the exemption
Of credits many of our wealthiest citizens
and money lenders would exoape taxation
we reply that such result would not
necessarily follow. Every system of taxa
! ton is deficient which does not provide
for a reasonable income tax. Minnesota
would take a proud step forward by
wholly abrogating a tax on credits and
adopting progressive income tax. The
! desirabi1ity of taxing incomes Is more
| fully discussed later in the report.