New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-02-04
MORTGAGE TAKES AND INTEREST.

The report on mortgage taxation presented
on Thursday 10 the Chamber of Commerce by the
committee on state and municipal taxation con-
tains some interesting figures with relation 10
the present tax law. The committee objects TO
the law as involving double taxation, and favors
the substitution of d recording tax The Tribune
has often said that mortgage taxes were bad in
principle, and last year urged the recording
tax as an alternative 10 the annual tax. The
latter, however, is such an Improvement on the
old taxation of mortgages locally as personal
property that we have been inclined TO think it
wise 10 give the new measure more than a few
months trial before again attempting IegisIa-
don. If the rural counties which have long Sc
cured q considerable revenue from mortgage
taxation could be persuaded TO see the wisdom of
foregoing IT, we should be glad of the nearest
possible approach 10 exemption; but we have not
been sanguine that the chances Of that were
equal 10 the dangers Of some reaction toward
ancient abuses and the repeal of the present law
50 as 10 leave mortgages subject TO the old con-
hscat0ry hit or miss levy. The committees sta
iisucs. while they do show the existence of
certain burden on borrowing. do not show that
II Is as great il is frequently represented and
certainly do not show that the new tax is nearly
ms bad as the old and 2s2 per cent taxes on
some mortgages. which combined the evils Of
inequality and excess.
The committee says:
The complete abolition Of mortgage taxa
ton under the earlier conditions of law. stand
ing by itself, would have brought about q
sensible reduction OF the lnterest rate on mort
cages. Your committee stated here some years
ago that this reduction would amount probably
20 one-half of one per cent year in New York
and still more in country districts This esti-
mate must now be reduced because Of the sys-
ten Of fun value assessments in our city. The
OLD tax rate having been cut down one
4ra 81
the excess interest rate under the old law
should be reduced in the same proportion
Thus, if The local tax valuations and rate had
remained the same, the opponents of the law
concede that ii would not have raised the inter
est rate at ALL barring some slight allowance for
veXation due 10 a new law requiring care on the
part Of investors. The one half of one per cent
tax would have been offset by the one-haif OF
one per cent excess above the normal interest
rate caused by the old danger of being caught
for personal taxes. As that danger by reduc-
iiOn Of local tax rates has been cut down one
third, this insurance charge against personal
assessment, if the law had remained unchanged.
would have been cut down TO one-tbird of ono
per cent, and the new tax of One-half of one per
cent would have raised the mortgage rate onIv
one-sixth Of one per cent, plus allowance for the
bother Of the new system. Yet opponents of the
law have been offering 10 prove TO us by STA
fisiics that the new law had raised the interest
rate ".525 of ] per cent above what was ex-
acted when mortgages were subject 10 tax as
personal property. If tnat is true. either the
Chamber OF Commerce report is all wrong In its
reasoning or the increase in interest rates is not
due TO the new law but TO other causes coinci-
dent with f. According to the committees rea-
soning, the law. whatever its practical or the
oretical faults, is TO blame for only a trihing
increase In Interest charges. which is likely TO
dAeiine tc--Shat as investors become aceus-