River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1905-08-24
The Sentimental Side of the
Taxation of Credits,


of the taxatic of credits, but in care
fully considering this aspect Of the
question and placing it along side of
the practical characteristics, it seems
to lose the force we had anticipated.
1t is assumed that the sentimental
quality would touch upon the moral
attitude involved the question of
right and equity, but we fail to see
that wrong is done to the debtor or
to the state by the exemption of
credits from taxation. The senti-
mentalist asks: "Why should the
money loaner be excused from pay
ing taxes?" The question befogs
the issue. He should pay taxes on
the property he has in his possession.
Let us ask another question: Why
should he pay taxes on what he
HASN'T Property pays the taxes
whether it be "an estate, goods or
money" 1t makes no difference to
the state where the property is or
who has the possession. But senti
ment would make the creditor pay
the tax on the property his debtor
has possession and use of but at the
same time the law makes the debtor
pay it. Some sentimentalists would
exempt the debtor and make the
creditor pay. They seem generally
to apply this contention especially
to those transactions in which
mortgage is given as security. It
the principle is correct it should APP
ply to all credits. Does it look like
hardship for man to pay taxes
on land he is owing for? Suppose
he borrows money, who should pay
the taxes on it, either or neither, or
botha By the old law both are sup
posed in theory to pay it. In prac-
tice neither pays it.
The sentimentalist asks us if a
man holding securities up to $780,
900 should be exempt from paying
taxes on these securities while
the property which these securities
cover pays all the tax. The proper
ty pays the tax. Is it a burden to
the debtor who has the use of the
property9 He need not assume the
debt. Nor will he and agree to pay
the tax unless it be to his advantage
to do so.
The creditor shifts the tax upon
the debtor who has the use of the
property. How does he, the credi-
tor, excuse himself for insisting that
the debtor pay the tax? He will
say the borrower agrees to it. If
we ask him why he requires the
debtor to pay the tax he might,
pertinently, and s'impertinently,"
tell us it was none of our business,
the business is done between the
parties engaged in the transaction.
The equity of this question may be
rightly tested by DR.. Gladden's in.
depreciation: s.Justice in exchange
means that each party shall be the
gamer in the transaction, or that
neither shall be the loser" Many
Missionaries advise men never to 90
in debt. That is foolish counsel.
Men are assisted into competence or
fortune by assuming Indebtedness
in borrowing money or given credit
for goods or an estate. eCredit,"
trust in ones ability and honor, is an
incentive to work and to economi re.
1t induces thrift. It helps vastly in
the creation Of property. This sym
pathy for debtor is needless, detri-
mental.
But we suspect the merciful coul
of the sentimentalist is moved to
pity by the assumption that the
debtor is oppressed. The aShy-
lock- has him at a disadvantage.
There is no moral excuse for the
creditor, because of his wealth, to
resort to oppression.
The loaning of money is governed
by the same economic laws as those
that control all other kinds of trade,
Supply and demand regulates the
price. A man invests his money in
government bonds that pay three
per cent interest. He can loan his
money here on real estate security
at six per cent. In North Dakota
he can loan it on farm lands at from
twelve to twenty per cent. And
this is business. The government
bond has fixed value. 1t is abso-
lutely safe. The interest is paid
promptly. These bonds cannot be
taxed by the states. The mortgage