Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1902-06-07


AS a rule those with small holdings have
paid taxes in much greater proportion to
their ownings than has the man of abun-
dant means who makes q business of loans.
We have known widow with $4,000 worth
of loans to pay larger tax thereon than
that amount of security. One Of the fun
damental principles of taxation is that all
interests that enter into the same competi-
farmers widow with $4,000 or $4,000 to
loan-(By the way, frequently the only re-
course of the widow on the husbands death
is to sell the farm and loan the proceeds
unless there are sons to carry on the work.
has to compete with the rate fixed by
the non-taxable loan of the professional
cally untaxable loans of life insurance and
trust companies that pay percentage tax
on gross income in lieu of other taxes. The
result is apt to be that she has to pay from
80 to SO pei, cent. of her income in taxes.
You can readily see how such is the case.
Ordinarily loans now command to per
cent interest In many places taxes are 2
vens Point last year the tax rate exceeded
3 per cent? One extreme case we know. of
is that of widow with loans aggregating
The unwary and the conscientious are
the victims of great injustice in this way.
Here is another case: In 1900 Portage
accounts, bonds. credits, notes and mort
cages and of this amount a farmer friend
Of mine in an adjoining township listed
$4,000 for taxation, which was over 1-27
of the whole amount in the county. At the
same time the banks of Stevens Point had
deposits of over 100000.
One of the prime objects of my bill No.
284A was to place each and every individ-
ual lender on the same footing 1t would
do this because every lender would be taxed
on his mortgage, unless he bargained with
the mortgagor to pay the tax for him. The
conscientious person would have the same
opportunity to SO bargain with the mort
gagor, thus the payment Of a tax on the
mortgage would not depend on the flexibil-
tty of the lenders conscience Again, in
taxing the mortgage a like tax was to be
RENTED from the tax on the realty, thus
ture Of the present practice, which was the
second prime object of No. 2s4A.
To tax the farm in full and also the
mortgage thereon in full is double taxation
to the extent of the mortgage equity. For
example, A and B each have $4,000 farms.
On BIS farm c holds a $4,000 mortgage:
BIS farm and that together they own no
of $1o6 tax to raise OF, this property. A
the faF Ray and a9 oy $I Pay s5 e
the tax, while the farm of equal value
owned by a pays vs. only 2- do Of It Ny o bi1l
would tax $4,000 $1,000 and nd $1,000
right. He certainly would not do SO unless
c made concession in a lower interest
F 5e farm mhe eRn AS d h5H T9 g a Rad $50 &c., and
$500 tax on said property 1--WE know
that some will claim that C will have it
in his power" to compel B to pay C's por.
that be true, that c has it In his power to
raise the interest rate when taxing his
mortgage to him in addition 20 taxing BIS
farm In full to B, as he would compel 3 to
pay his proportion Of the tax. In the one
raised and A $50, and in the other case a
pays $40 tax, B $40 tax and $50 higher
interest to c., who can then turn it over in
taxes to complete the 500 tax money to be
the tax, and under our present law, as
aforesaid, the holder of the mortgaged farm
pays more than his share.
Regarding this question. the editor of the
Outlook in the March 30th, 1901, number,
covers the ground briefly and to the point:
He says: "There is certainly no defensible
principal at the basis of any tax on mort
cages when the property mortgaged is al
ence of the mortgage does not increase the
amount of property involved. 1t simply
shows that two people own the property
instead of one. To tax both the property
and the mortgage means that heavier
tax is put upon property held by debtors
than on property that Is debt free. The
mortgage should be treated as a part in
terest in the estate mortgaged, and the tax
upon the property should be divided be-
tween lender and borrower, as the law, or
ment practically states the provisions of
2S4A and the reason for its introduction.
1t was wholly a corrective measure, not to
provide more revenue-it would raise less
but to take off a tax where now two are
exacted from the same property, and Incl
dentally to place all lenders on the same
footing.
The Massachusetts Law.
For twenty years Massachusetts, has had
a law after which No 2S4A was patterned.