The Big Sandy news. [volume] (Louisa, Ky.) 1885-1929, 1907-11-15
THE NEW WAY TO
TAX MORTGAGES
Growth in Favor Of The Regisha'
ton Plan.
0everal States Now Tax at Five Dol
lars a Thousand When Lodged
For Record-HavlnG
Good Effect.


IN Kentucky by the state and by coun :
ties on real estate lien notes and :
notes. This subject OF mort
gage taxation Is one that Kentucky
should very carefully consider. 10
most states II has been recognized
that to tax mortgages is TO impose
double taxation. sincs By the borrow
ing OF MONEY upon real estate no new
property has been created. but only
the same property twice. II has been
considered, hOweveC. that the state he
untitled to some revenue from this
source. and other states have solved
the problem BY lsvying . registration
TAI upon mortgage Under this sys-
tenn. when . mortgage 4 nled for rec
ord II pays q tar Of nvs doilsrs on
each thousand dollars OF the amount
secured BY the mortgage No subse-
Quent tai is imposed and the entire
amount OF the tar collected goes into
the state treasury.
Where this system has been thed.
tho result has beer q considerable In |
crease In the revenue from TAXATION
Of mortgages The system which We
are trying in Kentucky. BY which the
county clerk IL required to make
correct return to the assessor Of all
mortgages. gives very little chance
for any mortgages TO escape TAXATION.
SO that to adopt in Kentucky the sys-
TEN OF q registration tax on mort
cages would not be productive OF
more revenue, and might possibly be
productive Of less; but II is question
able whether the slight additional rev
enue derived from these mortgages
makes Up for the injustice done TO tho
borrowers Of money 1t is not conceiv-
able that a man viii lend money al 3
or 6 per cent. and then pay from 2I5
10 3 per cent in the way Of tax, and
yet II would amount 10 this in very
many Of our Kentucky CITIES and
towns. Rather than do so. since he
can not now, under the Law, avoid dis
closing his possession OF the mort
. gage. the lender viii simply retir'
from the money lending market
, These restrictions curtail the amour
! OF money that will be loaned on mort
cages and result in a hardship TO Dor
rOwers Il should be remembered
l also, that the borrowers affected. fl
: this case are OF the very best class
farmers who need to raise money d
O their farms: men Of small means VIII
, desire TO borrow money to bull
4 homes, as well as men who pledg
: real estate TO aid them in EXTENSIVE
5 building or industrial operations. Tn
e possibility Of borrowing the none
e they need from private sources ha
y always been OF great advantage {
A people OF these classes. especially I
e small towns and cities where Their
q are not so many trust companies NAL
vi ing loans The lender might stan
u the burden Of the tax II be were a
II lowed 10 add that amount to his rat
" OF interest. but he is headed OF l
i. that direction by the usury laws. 1
ie many cases be takes chances on thi
le point and by various devices will COZ
lc irive 10 collect from the bnrrowe
' some extra premium by way OF oiise
a TO the tax he must pay on the NOR
1t gage. In this way the burden fall
Z direct on the borrower and must il
p eyitably tend to increase the interes
N rate on mortgage loans.
'e That a tax on mortgages does :
increase the interest rate on NOR
e gage loans has been clearly proved
a the experience OF New York.
'e II Is not TO be supposed that ther
IN will be any opposition to the tax o
y mortgages on the part OF corporation
e which have money to lend. since.
2 Law. hanks and trust companies ar
y not specifically taxed on their NOR
n gage loans But any banker dislikes I
10 see anything done that restricts N
- amount Of available capital In IN
state. for such restriction Of availabl
e capital means restriction Of bus
ness. restriction OF all form
3 Of progress that make the stat
more prosperous Experience has. u
le TO this time. demonstrated that IN
8 only benefciaries Of the attempt I,
. rigidly tax mortgages are the foreig
Insurance companies. which come int
the state and lend their money and
y being resident In other states. do no
have TO pay tax on their mortgago'
The same registration tax where
has been adopted Is applied TO IN
mortgages filed by railroad and Othe
corporations. This is proving NOR
effective way Of taxing bonds than l
take the chance Of individual holder
being willing to give them in fer Ia,
alton. which they generally TAIL TO dC
in view Of the fact that the hona
rarely pay more than to 10 per cen
and ihree.ifths to threef0nrihs q
this would have to be given IN to III
I, tax gatherer II the bonds are listo
With the assessor. And men will M
I. willingly submit to conaScation.
/, The subject Of taxing credits Is on
Of the most difficult in the realm 4
I. taxation. ana I, Is a field where mi:
!, takes are most costly. because il
!, the taxation Of this form OF propert
u that drives capital from the con
!, nudity, aud to drive capital nom N
I, community means the curtallment 9
an the DnlCrnrlscs that build un IN