The Leon reporter. (Leon, Iowa) 1887-1930, 1903-09-03
TAXATION AND MORTGAGES.

was insignificant and derived almost EN-
tirely from inexperienced and simple
people of small means, who did not
know that nobody else was paying it.
Then came the tax ferret law, and while
a large sum of collections was made
under it, nobody familiar with the de-
tails and incidents of this roundup of
delinquents can regard it as satisfac-
tory method of raising revenue. There
was open scandals in many counties.
and the system is evidently favorable to
blackmail and favoritism. At best it is
an expensive and wasteful method of
collection. Finally, it has been inher-
entity unfair, because the mortgages
that were uncovered by the ferrets
were made at "a rate of interest which did
not contemplate taxation. 1t is absurd
to say that during the last five years
mortgages bearing five and six per cent
could as we'll pay the Iowa rate of taxa
ton as the average Iowa farm lands.
Some of the most striking cases of
unequal and unjust taxation ever
recorded have been witnessed in Iowa
within the last few years as the result
of the raid of the tax fcrrets for delin-
quent credits.
1t would seem to be superf1uous to at
tempt to show the incidence of taxation,
but the arguments for tax on mort
cages show that there are not a few
who fail to comprehend. LII all the
mortgages made in Iowa are required
to pay uniform tax, the rate of inter-
est will be high enough to include it..
Capital distributes itself in the several
fields of investment according to the
net returns, and any item of increased
cost will in the long run make itself
felt in the charges. For a long term
years it was the rule that the tax on
mortgages was not collected in Iowa,
and the rate of interest declined accord
ingly. No one can believe that interest
would have been reduced to five per
cent with an understanding that the
usual taxes of Iowa towns would be
taken from it. The residents of Iowa
cannot afford to put their money at in
terest within the state and pay the reg
ular tax rate.
The state of Connecticut threshed
out this subject some years ago, and the
law finally adopted there, and which
appears to be giving satisfaction, is de-
scribed by letter from Charles Hop
kins Clark, editor of the Hartford
Courant in public Policy Mr.. Clark
says:
with regard to money lent within
the state up to the assessed valuation
of the property, if the owner of the
real estate pays full taxes, the holder
of the mortgage is not taxed at all.
Under the strict construction of the
law, the owner of the real estate can
swear Off the debt and the holder of the
mortgage be compelled to pay taxes on
that, but the condition is made in the
loull lIliO UlIS oN1lCI VI lIlC lcdl SoUdtC
shall ask no exemption and pay in full.
If, however, the man owning real prop
erty valued at $4,000 mortgaged it for
S15,OO0 the other $4,000 of the mort
gage obligation would be taxed against
| the holder of the note
"If hold a mortgage on property il
any other state, except those which arc
exempted, or have any other evidence
of indebtedness, that goes in my ia.
list in the town where | reside an(
is taxed The same as other property
averaging through the state perhaps
one and one half per cent. But there il
a special law which enables me tt
make those same mortgages or notes o.
other evidences of debt to the stat,
treasurer and by paying him four tenth
OF one per cent per annum tax on thei
par value, ] can secure this exemption
from local taxation. We are allowed t,
pay that tax annually or to pay all a
once for a term of years.
ut would be impossible to tell yol
the details of the change Of revenue
that this last law has caused, except t,
say that there has been no perceptibl
falling off in the local tax list, Will
there has been a very large revenu
from registration at the state house
Previous to the passage Of that Law
which establishes small tax and Gre
ates a considerable relief of conscienc
it was quite customary to evade all ia,
alton on that class of property, which i
my own opinion should not be taxed a
all, because cannot see what make
a debt good except the property benin
it, and if that is SO taxing the propert
and the debt must be double taxation
Now while. the subject Of assessmer
and taxation is up in Iowa, is goo
time to consider what had better b
done about the tax on moneys an