Northern Wisconsin advertiser. [volume] (Wabeno, Wis.) 1898-1925, 1902-06-12

Injustice
As 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 a business of loans.
We have known widow with $4,000 worth
Of a, 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 eompeti-
lions shall be taxed alike" Now, IL the
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
money loaner, not to speak Of the practi-
cally untaxable loans of life insurance and
trust companies that pay a percentage tax
on gross income In lieu of other taxes. The
80 to 80 per 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
to per cent. on full valuation. Qn Ste
yens Point last year the tax rate exceeded
. per cent? One extreme case we know of
Is tnat OF widow with loans aggregating
$4,000 who paid over 500 taxes thereon.
-, The unwary and the conscientious are
the victims Of great injustice in this way.
county paid taxes on se3,s12 Of moneys,
accounts, bonds, credits, notes and mort
cages and Of this amount a farmer friend
VI ulue III an auJOlnlng 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 S500,000
One Of the prime objects of my bill No.
2S4A was to place each and every individ-
uai lender on the same footing 1t would
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
Of a IN ha
mortgage would not depend on the fexbil-
ity of the lenders conscience Again, in
RENTED from the tax on the realty. thus
doing away with the double taxation fea-
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
OK Bs farn an9 bods haye 1900
Now it is quite clear that owns half Of
BIS farm Ions and that that together they own no
would pay $40, B $40 and c $50. making
the farm and c own jointly pay 3-5 Of
the tax, while the farm of equal value
would tax A $4,000, B 81, 900 and C $4,000
II 3 agreed to pay C's tax for him, all
right. He certainly would not do so unless
rate. Then AS farm would pay $50 and
the farm owned jointly by B and c $50, Of
a, 500 tax on said property. 1--WE know
In his power" to compel B to pay Cs por-
ton of the tax. They forget, however, If
that be true. that has it In his power to
raise the interest rate when taxing his
mortgage to him in addition TO taxing BIS
farm in full to B, as he would compel to
pay his proportion of the tax. In the one
raised and $50 and in the other case A
pays $40 tax $40 tar and $40 higher
interest to c, who can then turn 1t over In
49, - 49, ~
raised) The farms, and they alone, pay
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 Both, 1901, number,
covers the ground briefly and to the. point
principal at the basis of any tax on mort
Ready taxed to its full value. 's1 The exist
of tas pESty dSss nS sn1 the
shows that two people own the property
instead Of one. To tax both the property
and the nt thai that IA heavier
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
the contract, may provide" That state
ment practically states the provisions. Of
2S4A and the reason for its introduction.
1t was wholly corrective measure, not to
provide more reyenue+t 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
law after which No 2S4A was patterned.
California likewise has had a provision
sufficiently similar to avoid double taxation
and to place lenders all on the same foot
ing, but as the parties to the contract were
barred from agreeing regarding as to who
should pay the taxes on the mortgage, the
borrower there has been subjected to a rate
of interest margin higher, plus the tax,
than he otherwise would have had to nay.
In his message to the New York legislature
last fall, Gov. Odell recommended that
mortgages be taxed n per cent. at time of
filing in lieu Of all other tax on them. Such
arrangements would poryide uniformity
and be the next move from exemption en-
tirely, a course advocated by a large ma
tority of the authorities on economic law.
All civilized states on earth, aside from
most of the states Of the United States do
not pretend to tax credits at ALL England,
Germany, France, Canada and other of the
civilized nations exempt them. Their laws
in regard to credits conform to the teach
ings of economists, the scientific authority
on such subjects. Is 1t not strange that
Wisconsin and her sister states should be so
populistic as to retain law so much at va
rance with economic law? Trying TO get
credit is not property. The trouble is in
the classification. The credit Is listed the
same as real, material property. The credit
Is only evidence that some other party has
Of the credit. The State should tax the
material property wherever found but not
utter an economic lie and try to tax the
man. too. who has parted with 1t. for that