Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1906-08-30
CLEMENT CRITICISED
&. smith shows Thai Ills Double
Taxation scheme would Invite
Disaster.

a representative of tho st. Adams Mes
senger to the remedy for double taxation
put forth by p. w. Clement. fusion can
didatc for governor, in his latest speeches
and circulated as campaign literature.
which says: Tho simplest and best
remedy Is to allow the farmer or other
real estate owner to offset the amount
Of the real estate mortgage against the
value of their real estate, just ms n debt
is offset against personal property, and
then tax the mortgage In the town where
IL Is recorded" Mr.. Smith made the fol.
lowing statement:
"Mr. Clements plan Of relief from the
evils of double taxation is unworthy or
n fo,irteen-year-old school boy. II Is act
ually destitute OF the first particle OF in
tellectual sagacity. It Is the hasty. heed
less. senaeless scheme Of n man desperate
to accomplish something he doesn't know
how to do. The plan is simple and sounds
plausible. But stop ard think. What re-
suits will flow from such legislation?
'1st. The grand list of every town will
be disturbed to such an extent that posi-
tive distress from local taxation Will re-
suit. IF Mr.. A.. n wealthy man in 81.
Adams. loans his money upon real estate
in Bradford his mortgages are taxed in
Bradford and not in st. Adams: because
they cannot be taxed twice. The tax rate
In st. Adams Is two per cent, which MT
A. escapes by ~loaning his money In Brad
ford where the tax rate is only ono Of one
per cent. So the ST. Adams grand list is
lessened. the expenses Of its government
continued tho same, and n stu larger
tax must be imposed upon the taxpayers
of st. Adams in order TO meet the bills.
"2nd. Savings banks md trust ompan-
les now pay taxes upon all deposits direct
to the State. Mr.. Clements new law
would put an end to all this. Millions
of dollars of these deposits are now loan
cd upon real estate mortgages in Vermont
II these mortgages are taxsd in the town
where they are recorded the bank canno
be taxed by the state on the deposits
which represent these mortgages. This
means a loss of revenue TO the State treas
urv Of more than 100000 per year. Then
will come a state tax again, something
we nave not had since Mr.. Clement adj
vocatnd one in the Senate Of 1900.
'3rd. IF the real estate mortgages held
by the savings banks and trust compan-
les are taxed locally in the towns where
they are recorded then there will he n
different rate of taxation in every town
where the bank does business. Now all
deposits pay 10 Of / per cont. in taxes
annually. With Mr.. Clements scheme the
mortgages in st. Adams will pay 2 per
cent: in Middlebury. 40 of l per cent;
in Rcadsboro. 2.S5 per cent. In Randolph,
45-t0o per cent; in Searshurg, $40 per
cent: in New Haven, 1-2 of ! per cent:
In Woodford. 2.75 per cent: in Essex.
$1,000 of / per cent. And so on with all
the variations and nuctyations of the diff
ferert towns in the state.
This means that no savings bank or
trust company can loan money on real
estate mortgages. Why? The legal rate
OF interest Is now & per cent. That's all
the bank can get. Most banks are now
paying 31-2 per cent. upon deposits. Sup
pose the Franklin Count Savings Bank
and Trust Co of ST. Adams loans $1,000
on a house In st. Adams. II must pay
3-1-2 per cent. for the money and . per
cent. IN taxes upon the mortgage. 1t
costs 6-IO OF I per cent. TO carry on the
business of the bank. That makes six and
one-tenth per cent. or a net loss to the
bark Of Ito Of l per cent. OF course the
bank cannot make such loans. 1t could
only loan money in towns where the tax
rate is exceedingly low. The property own
ers Of St. Adams and OF all other towns
where the tax rate Is $50 cents or over
would be absolutely poworiess to borrow
a single dollar upon real estate mort
cages: because no man or corporation
would loan money whore it would net a
loss to tho lender.
18th. No money would be invested in
Vermont mortgages by people living in
other States. Such loans would be sub
jected to the various rates of town taxa
ton from year to year and all such money
would he driven from the State
18th. Mr.. Clements plan will uproot
the present corporation tax law which
now paws every dollar Of the expense of
our State government. The entire tax
upon savings banks and trust companies
will be los, to the State and a State tax
upon every property owner must follow.
18th. II Mr.. A. IN st. Adams, where ths
local tax rate Is . per cent. has 5000 to
loan he will loan it In a town where the
tax rate Is less than . per cent, because
his mortgage. under Clements proposed
law, will be taxed In the town where il
is recorded. The capitalist will manifestly
seek the town where the tax rate Is lowest
and shun the town whore the tax rate Is
high, This will work to the very serious
Disadvantage Of all towns having a high
tax rate ard residents Of those towns
will not he able to borrow money at all.
"Nen with money to loan will loan II
outside the State and Mr.. m could
not tax this money under his proposed
law. Ills plan would not and could not
tax n mortgage on property outside the
State although the mortgage was owned
by n resident of the State. This would
result In driving all money for invest
mcnt outside the State. No savings bank
or trust company could live a year under
such a law. Every one OF them would
go out of business. Financial disaster
and ruin would follow and the poor mel
and the borrowers would suffer most
Loans would be called and could not b'
paid; foreclosure and sale of MORTGAGE
property would follow and the worst fin
ancial distress which ever cursed n STATE
or country would work to the end of tn
Clement plan of taxation.
"The whole scheme Is fraught with tn,
~gravest danger to our safety MS n State
1t is n wretched makeshift thrust int
this campaign to mislead the voters. !
such a plan ever becomes the law OF thii
State Vermont will most certainly b'
r 'hitched to n post and the post will b.
set in a bottomless pit. The scheme Is
. disgrace to Mr.. Clement. He knows, o
ought to know, the awful consequences o
such legislation. And yet he deliberatel,
i, proposes TO lead Vermont into such
49, 1900