The Barre daily times. (Barre, Vt.) 1897-1959, 1911-01-27
TAX ON INTANGIBLEs.
Senator Gordon Explains the Intent of
His Bill.

His Bill.
Senator Gordon makes the following
explanation of his bin taxing intangi-
bles
Senate bill I72 establishes uniform
or fiat rate for taxing intangibles. In
tangibes are notes, bonds, accounts,
mortgages--in short, all the subjects OF
taxation except polls, real estate, spe-
cihc articles of personal property, and
except public service corporations, banks,
etc, that are otherwise specially taxed.
The bill does not change our general
system OF taxation. It does not abolish
offsets except to the extent of the in
tangibles that are taxed at the rate OF
seventy cents on dollar of the grand
list. The same rule applies as in the
case OF bank deposits. If taxpayer
has $1,000 IN savings bank, it IL now
deducted from the amount Of his offsets
and the balance of his offsets is allowed
him. In like manner, $1,000 of intangi-
bles will be deducted and the balance Of
his offsets allowed
The effect of this system of taxing
intangibes is well illustrated by com.
pairing Pennsylvania and Ohio. In 1885
Ohio had $3.50. 100000 OF taxable intan-
gibles She continued the same system
as we have of taxing at the local or
town rate. In 1906, or twenty-one years
later, she had only little over Sl47 .00O.-
600 of lntangibles, 80 far as her tax
list showed. She had lost to taxation
nearly 100000. On the other hand,
in 1881 Pennsylvania had Sl450000 900
OF taxed intangibles. She adopted the
fiat rate of taxation In 1906 she had
$l,0l4,000,000 Of taxed intangibles. She
had gained Ss60,0O0,000, She had in
creased her tax list about six times,
while Ohio had actually lost ground to
the extent of nearly 100000, The
two states had meanwhile increased in
wealth and population in about the
same proportions We do not see why
similar result would not be reached
under the proposed bill.
The sequestered intangibles that do
not now appear in our list would be
uncovered BY a low fiat rate in the
same way that cash has been uncovered
by the low rate OF bank taxation
But there is another side that Is
equally bright. A young man to-day
who wants to buy farm cannot do
so unless he has forty per cent. Of the
value to pay down. The average young
man does not have that amount. No
individual can afford to lend him the
money and pay the local rate OF taxa
ton, No bank can lend him over sixty
per cent. OF the value of a farm. He
therefore loses an opportunity to start
in life Such situation is a blight on
our agricultural and industrial develop
ment, The financial blood Of the state
is drained into our banks, which neces-
sarily become western loan associations.
About S45,000,000 Of savings deposits
are invested in outside mortgages and
bonds. Only Sl5,000000 are invited in
home mortgages We have been heap
ing up millions in oar banks. admir-
ing the pile like miser, but getting
only fraction OF the benefit from IL
that we should have enjoyed. We need
the individual lender everywhere He
can loan on terms and under conditions
that would not be permissible or profit
able for a bank He can supply, as no
one else can, the small and scattered
financial needs of our communities. The
sum Of the activities that he can stimu-
late will help to build bigger and
better Vermont
The banks viii be benefited in the
long run. The added business that the
individual lender win help to create
will bring deposits TO the banks In
the end no one will lose, but all win
gain The results cannot be attained
in year Ii has taken thirty years
to bring us to our present unfortunate
In a third OF that time the
policy of this Senate bill viii remedy
much, il not all, Of the evil No other
remedy appears available. The exemp-
tion Of Vermont mortgages, bearing a
low rate Of interest, would automatical-
" exempt a large amount of property
under the protection of the federal CON
stitution and laws. The abolition Of
If it fulfilled the hopes of its
friends, would only equalize taxation.
It could not create business as the
individual lender can