The Richmond Virginian. (Richmond, Va.) 1910-1920, 1910-04-01
EDITO RIAL
The Mortgage Tax.

The Mortgage Tax.
@ The Asheyille Citizen discusses in an enter
aiming manner some of the mistakes in the tax
S1Aws Of North Carolina, but in the course OF ITS
remarks makes statement which We do not under
3sstand 1t expresses the opinion that the mort
xace tax law of that State does more than any
other statute to keep foreign capital and adds
'sAs matters stand now, outside inves-
tors cannot take more than . per cent
interest on mortgages and when they have
III to pay one and half to two and half
per cent back for taxes they have made
poor investments. Not much capital can
be expected TO float into the State with
# the princely prospects of three and half
al per cent; the return ON investment is too
small No one will dispute that the most
prosperous farming country is the far
West where there is no taxation on real
a aSz estate mortgages. There the contracting
parties can agree on any rate of interest
Nj from to 10 per cent and not any of it has
to go back in the shape of taxes. The
w result OF this IS that the tide of capital
is ever turned westward, while the South
sits alone in solitary splendor, hugging
SE her mortgage taxes.
|N How can that bef How North Carolina
impose tax upon mortgage held by money
#sN&AQef Il
Richmond, Va, for example should lend money
Hin real estate in Ashevie, taking mortgage on
hid property to secure his 1oan under the laws of
Virginia the note thus secured would be subject
~ taxation in Richmond, but not in Asheville.
S However, this but to emphasize the alb
z&ardity of the mortgage tax. If the Richmond
nan should purchase house and lot in Asheville
y Richmond would not tax him, of course, on his
North Carolina investment But when he lends
lke money Asheville real estate he is required
fo list the amount of his loan for taxation in Rich
6hond The Asheville borrower pays taxes in full
en the assessed value of the property, and yet the
KINDER pays taxes in Richmond the amount of
HE debt
xg Our Asheville contemporary touches on this as
ect of the subject in another part of its article.
SzE says:
There is loud clear call for some
k sane legislation along these lines, and while
we are on the subject, We will touch on
u another form of taxation, double taxation,
which not only keeps wealthy and desir-
z able citizens out, but drives some of them
away after they get here We refer to that
law which requires man to pay local
%E NJ taxes on investments owned in other see
tions of the country. This is not
toned in reference TO any particular case,
hut the objection has been so often raised
|SS#sss By prospective settlers among us that
NAV say that it is applicable to every
wealthy man who has contemplated max
ing a permanent home here. as well as to
those who have from time TO time acquired
homes and moved away after short stay.
As long as such conditions are tolerated
N we arc truly standing in own light.
This sort of double taxation not only discourages
nvestment and enterprise but leads to tax lodging.
H34nuu ms hat 10 heluC ypd
e is apt try to get with the State by evad-
#3ng the law in some other direction
M But the worst of il is that the borrower is the
aan who pays the double tax for the lender, for
I'M he may be able adds the tax rate to the interest
#xafe We are not concerned for the money lender
md are not disposed to lessen his burden but for
Me sake of the borrower believe that the mort
EAge tax should be abolished 1t is the only relief
hat FOR the borrower. The ruling rate of
interest in Richmond real estate loans is per
INT and that is not high rate when 1t is considered
1kat the lender is subject to tax of "a per cent
IA the amount of his oan thus reducing his net in
opme to IA per cent But if there mort
age tax the lender could well afford to put out his
money at per cent. interest. And the State would
1tu get all the tax to which she is fairly entitled
rom the property itself.
II may be argued that the lender would still
Hharge the legal rate of interest if his loans
we're exempt from taxation. And so he would if he
could get it But it must be remembered that there
q A competition in money lending we'll in other
n branches of business and competition would fix
the rate There would be abundance of per
#Nent money in Richmond if there were no tax on
xeal estate loans and it would be greater stim-
Nlns to building operations.
The Wednesday Club.
IS should not be necessary to appeal to the pub.