New-York tribune., 1903-03-30
MORTGAGE TAX PLANS.

Hovy that the Mortgage Tax bill. In its pres
on, form has been definitely abandoned, the nat
ure of n substitute remains to be determined. No
agreement sppears to have been reached on that
! Suhiert but there is some talk Of reducing lhe
| proDosed tax of four mills TO one OF two mliIs
| and of exemptinG the mortgages heid py odliAs
| and insurance companies. Before any such pidll
| is adopted. it would be wise TO give cdrelui
| consideration once more to the recording taA
| scheme embodied in the Stranahan bill ot last
| wear which was passed by one house ana was
| generally accepted as a reasonable soiuroh VI
| the problem. even by those who on prlncipie
opposed any mortgage tax.
Reduction in the amount Of the tax levied on
the plan now before the legislature VIII not
remove the MANY objections to it on principle
and also on the ground that II is cumoersohie
and annoying The difficulty of distinguishing
between dead and living mortgages will re-
main; the injustice of taxing debts due TO cit
izens of other States, on which they may pay
tsxeS at home will remain. An elaborate ma
chine will have to he created and vast amount
of work done to collect comparatively smaH
tax. The complicated process involved III the
taxation Of corporate bonds, which are lien
upon personal property and franchises, as Wel
as on real estate, will not be avoided More
over additional exemptions while they INA!
reconcile certain special interests TO the tax, do
not make Il sounder in principle. If mortgage
taxation is just. 1t should apply generally ana
not be SO levied as to favor loanfng trust-
II. as is everywhere conceded, the borrower
paws the tax he can as well afford to pay II
when he borrows Of savings bank as Wnen
he borrows OF his neighbor
A recording tax can be made simple ana
essv Of collection. and can be without injustice
It'll 81 vfororr in
dividuaIs or corporations, residents or non-resi-
dents. II every mortgage must be stamped
when It is recorded, the tax is collected auto
maticaIIv. lust as the federal transfer taxes
were. The stamp dated at the time OF the re-
cording would be good for the life of the mort
gage as specified in it. If it were allowed TO
run longer uncollected, the holder could De
compelled to record 1t again or merely to re-
new the stamps for every repetition Of the orig
ipalIv named period for which Ii is allowed 10
run This stamp tax would be no great hard
ship, even to the nonresident 1t would be
part of the expense of making mortgage,
aIong with searching and recording, and would
be cheerfully paid If 1t guaranteed exemption
from the present iniquitous hit or miss per-
sonal tax. Mortgages are here mostly drawn
to run for three years, and the chances are that
every mortgage would pay its toll about once
IN SGSyf years, except thOSe seCNulHG AoHS tSIl
tonds, which are now issued at so low rate
Of interest that the less frequent taxation would
not be unfair.
AS matter Of principle, mortgages should be
exempt from taxation, but it Is evident that
complete exemption cannot be secured The
representatives of communities which are now
not ashamed to halve the income Of widows and
orphans, while the bulk Of mortgages in their
districts 60 untaxed, would violently oppose
any such measure, and q demagogic cry would
60 UP about freeing the investments Of the rich
from taxation Just as If personal property was
not now largely exempt and the people who
suffer from the present inequalities were not
those In moderate circumstances. Last year
rural lawmakers defeated the STanahan bill.
because they did not want to give up the heavy
taxation Of the comparatively few mortgages
on their rolls. They may still be reluctant to
equaIize the tax, but IL they can be brought to
see that q recording tax on all mortgages is
likely to secure as much revenue the pracd-
cal confscation Of the income from the few
mortgages which assessors happen to discover,
they may take more enlightened view. A re-
cording tax on all mortgages which did sway
with the great hardships and Inequalities OF our
present personal tax laws would secure reve-
nue. do justice, and invite the Investment OF
capital in mortgages In this State, particularly
in the rural regions, where money for Iegiti-
mate business enterprise is often so hard to
borrow.