The Barre daily times. (Barre, Vt.) 1897-1959, 1906-08-30
ALWAYS A FAILURE.
Missouri and Michigan Have Tried Glenn
ent's Misleading Tax Plan.

A Burlington Free Press representa-
| tive called the attention Of Hon. G. r.
Smith of that city to perciyHl M. Glenn
lent's plan for solving the problem oi
double taxation III this State and asked
his opinion concerning it
Mr. Clements plan AS it appears IN
printed circulars issued by the fusion
State committee il as follows
The farmer or other real estate owner
should be allowed to offset the amount
Of the real estate mortgage against the
value of their real estate and the mort
gage should he taNed il the town where
lit ii recorded.
n discussing this proposition Mr.,
Smith said:
Mr.. Clement and every other man
who has given any attention to the ,iou-
BILE taxation problem must know that
the proposed plan has been tried and
exploded many times. un its face it is
Enthusiastically attractive but in practice
Iit has always been Somplcte failure.
The difficulty lies Id THE fact that
Ia method of taxing maftQageA preNcl,
the borrowing I'll money on real estate
in States where there Is Il iixed legal
rate of interest except Iii towns where
the rate Of taxation n 80 low that
money loaned would bring good re-
turn above the tax imposed. IN Vermont
this would deprive real estate owners in
towns where high tax rates prevail OF
the privilege Of mortgapiug their prop
efty, and as rule these are the towns
where money IL most needed
For example, the tax rate in the
city of Barre ~, believe, about 2.26
per cent. on the grand HIST Under Mr..
Clements plan Il mortgage Investment
there would net, above the taxes 3.35
nor cent The borrower would be re-
te % 4 certain extent but the diifi
eiil o.ila "a .a the fact that inves-
t9ss esd.ll mol aiM would not loan money
aHdef spcsl mi arrangement. Some towns
in The State have d tax rate OF three per
cent. or more. and of course the returns
on investments would Be corresponding
~ lower
Added To this would be the effect ot
|fiuetuating tax rates upon long time
loans. A great many farm loans in
Vermont are made for periods covering
from FIVE TO ten Years, and the net in
come Of such investments could not be
assured for more than q single year
within four or Ave years the legis-
lature Of Missouri yielded to the de-
mand Of farm owners and enacted just
such law as MIR. Clement proposes. 1t
resulted ia the withdrawal Of all large
loaning interests and this with the in
creased rate OF interest ON such loans
as were made had SO disastrous an ef.
feet on the farming interest of the State
that the next legislature repealed the
law at the demand of the very farm
owners who had urged IL Michigan,
too, tried the same law several years
ago and after Il had been in operation
a short time d majority III the legisla-
tors who enacted TIE law petitioned the
governor 10 call an extra session Of the
legislature to repeal 1t. Other States
have tried the same plan but everywhere
IL has not only utterly failed 10 solve
the problem but has resulted disastrous
II.
Briefly the results Of such law
would be 10 drive money from the State
to others which do not tax mortgages in
the way proposed.
ut would prevent the loaning on mort
gage Of any money whatever IN towns
where taxes are high.
IF money cannot be borrowed on real
estate, the value Of real estate would
be reduced. A very large percentage Of
real estate sales are made where part OF
the purchase price at least Is secured
bv mortgage back, and anything that
makes ii difficult to borrow on mort
gage lessons the number Of purchasers
materially and reduces the price of real
estate.