The times. [volume] (Richmond, Va.) 1890-1903, 1902-06-21
THE MORTGAGE TAX.


The Petersburg Index-Appeal does not
agree that mortgages should be exempt
from taxation. It may be well enough
to say Just here that in point OF tact
mortgages are not taxed in Virginia.
The mortgage tax, se-called, is term OIL
convenience In Virginia we tax the
note. which is the evidence OF debt, ana
in the case Of real estate loans. such
notes are secured by mortgage but the
assessment is against the note and not
against the mortgage.
However, this is a nero difference III
terms. Tho point at issue is the same
in either event Our contention is that
if there were no mortgage tax. that IS
tn say. no tax on real estate loans Sc
cured by mortgage, the rate OF interest,"
would be lower and the borrower would
be benefited to that extent. Our Peters
burg contemporary thinks. however, tha1
tho money lender ought to be made 10
pay the tax. Suppose 1t were true"
says our contemporary. that the ex-
emption of mortgages from taxation IN
clined the money lender to give TO the
borrower what the State had released 10
him. is that any reason why the lender
should be permitted to use his money
for a profit and pay no tax for the pro-
lection which the State gives him ana
his property, while another whose money
is uninvested has to pay tax on IL!
Our contention is that all actual proper
tv should be taxed once and only once.
When a lends money to Is to oulid d
house. and 3 uses the money Tor that
purpose, AS money is changed into brick
and mortar. Before this change was
made the money was assessed against a
After that the money is converted into
house and the house is assessed against
IL. the State has no moral right there
fore to assess A on his note, which is a
mere evidence Of debt All that the
state has to do with it is the actual
property.
has parted from him, and If b pays the
tax for him, a ought to be exempt
There ought to be some way, however,
to make A pay his part Of the tax on the
nronerty upon which he has made the
loan. Under the present system B has
to pay the whole tax. What we are
after is not to exempt A, but to re-
1ieye 3 of an unjust burden that is put
upon him.
He is made to pay on all the property
that he has paid for, and to pay on the
debt besides In the case Which we
have supposed, the fact is that the prop
erty is owned jointly by A and 5, just
as truly so as if they had entered INTO
a co-nartnership, B furnishing the lot
and A the money to build the hoose'
They thus become joint owners.
The Index-Appeal manifestly takes the
same view, for in a previous artlcle our
contemporary made this suggestion:
.Tha law should tax the face OF the
mortgage against the lender, and eA-
empt the improvements and conntio's
Of stool, and equipment made with ,the
mortgage money until such mortgage
shall have been paid off, and the prop
erty so released becomes a proper asset
of taxation in due course Oh business
This is the way to deal equltaply WIN II
the mortgage problem. Don't put all
49, hur6en on the poor borrower, but let
the rich lender bear his snare also.
we confess that that would be the
fairest and most equitable way OF appor-
tioninc the tax burden between borrower
.,d lender in q case of this description
PIT we have said that in our opinion,
tiOnS and con-
fusion. The IndeN-Appeal asks why. -
seems to us a sufficient answer that an
ottempt would here be made to make
ono man pay taxes on property staholls
=; ,o+her mans name. If the man VINO
lends the money is NONRESIDENT, tue
difficulty would be so much the greater.
ETrst of all the State would nave TO
rna this man and assess him, and how
could it do so If he did not hve III the
s,,+e9 But even after being assessed, II
he should refuse to pay the tax, What
redress would the State have! 1t couid
| not nut the improvements up and sell
| them to meet the tax account. But even
! II II could, the owner OF the lot upon
| ,,,;cb the improvements stood, could not
AFFORD to let the property be sold for
taxes. and so the burden would at last
fall upon him.
II seems to us that the only safe rule
| for the State to follow is to tax all tan
rible property against the person in
whose name it is held. And SO we
come back to the original proposition
that the only relief to the debtor that we
can see is to exempt the mortgage or Its
equivalent from taxation. .-:-..s..-.,