New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-03-10
PASS 1T.

The Stranahan Mortgage Tax bill has been
amended TO meet the wishes Of rural taxpayers
without in any wise impairing its value as
measure for the correction of the monstrous
inequality and injustice of the present hit or
miss method Of taxing mortgages In its new
form it ought to command the cordial support
Of the Republican majorties of both houses
and speedily be put upon the statute book. Inc
division Of the proceeds of the proposed tax is
matter of minor Importance. and if any sec
ton Of the State will he more ready to give up
such little revenue it wrings from the few
mortgages now on It's assessment rolls because
Of the concession returning to each locality the
stamp taxes collected therein. the return should
by all means be made. If taxpayers prefer to
make their contributions to the States expenses
through the general property tax and retain for
their local use the Indirect mortgage tax, in
stead Of leaving the latter to the State and
using their local revenues entirely at home,
there is reason why they should not be ac-
commodated. Possibly one town may gain and
another town may lose a trfe by the change,
hut ii makes no difference TO the people of the
State as a whole The only object of keeping
the mortgage tax for the use Of the State is
to abolish general property tax for State pur-
poses, and with it the bothersome equalization
business. On the other hand. such abolition
frees the State government from direct RESPONSE
bity to the taxpayers for its expenditures, and
il is by no means certain that the gauge of COM
parative economy which a direct tax rate fur
nishes is not worth more than freedom from
friction over equalization.
With the revenue derived from mortgage
taxation returning TO the local treasures there
is hardly community in the State which will
not benefit directly by the passage of the bill.
prObablV of fhn mort
cages which would be liable to stamp tax are
now taxed at the local rate, which averages
in the neghbOrhood of per cent. Under the
proposed law tax of mills would be imposed
once on every mortgage. on about thirty-three
times as many mortgages as are now taxed at
the higher rate. With the present average life
of mortgages that would produce a much larger
sum than is now realized. The fear, therefore,
Of some members of the legislature that in
doing an act of justice and equalizing the bur
den this important class of personal property
they would be entailing upon their people
sacrifice of revenue is fully met by the arrange
ment 10 give them the returns from all the
mortgages in their section. while now they are
able TO tax only an insignificant proportion of
them, and those largely the property of widows
and orphans. which. in all humanity, assessors
should fail TO find If they are going to pass by
any mortgages at all.
Another consideration which should prompt
the rural taxpayers TO favor this bill is the fact
that large number of county mortgages are
owned in the cities. Most of them are not
taxed. The revenue from those which are taxed
goes not to the locality where the property is
situated. but to the place where the lender lives,
Under the proposed law the tax will go to the
county in which the mortgage is recorded, even
if the owner lives abroad If the borrower pays
the tax he has the satisfaction of knowing that
it goes to lessen his burden Of real estate taxa
ton. If the lender pays it, then the contribu-
ton Of nonresident holders OF mortgages is a
clear gain upon the returns from the present
law. Nor. as has before been shown, will the
profit TO the people be confined merely 10 the
larger return from taxes. Even If the revenue
should fall below what may reasonably be ex-
pected, the taxpayers will greatly benefit The
land owners who carry mortgages will be re-
lieved. They now pay unnecessarily high rates
of interest as an insurance to lenders against
the chance taxation of mortgages at a ruinous
local rate. Mortgages, freed from the dangers
and uncertainties Of local taxation will become
increasingly popular forms of investment, the
volume of loans will increase swelling the rev
enue and correspondngly tightening other tax
alton, and at the same time. through COMPETE
ton, cutting down the prevailing interest rate
The great body of the people, therefore, will
find decided advantages in the passage Of the
bill. Above all questions of advantage how
ever is the matter of justice. The present
unequal taxation Of mortgages is a monstrous
wrong which cries aloud for redress and Mr..
Stranahan's plan is the only one ever devised
with any present chance of being adopted in
this State which promised TO do substantial JUS
tice. 1t should become law without fail