The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1911-12-26
Tax Rsform-Ii

with especial reference to the inter
est of the money borrower
list. Increase the state tax rate
on deposits of savings institutions .
from seven-tenths of one per cent to
one per cent.
End. Exempt all loans of record
made in Vermont by such institut-
ions at the interest rate Of five per
cent or less We would make this
exemption general. TO ell such loans
placed by any institution, company or
individual.
BY savings institutions we include
not only savings banks and trust
companies incorporated under state
law, but the so-called savings de-
patments of national banks, which
are now taxed by the state in a man
ner similar to state institutions and
at the same rate. These savings de-
partments are in competition with
savings banks proper Generally,
they offer a lower rate OF dividend
to the depositor, but by permitting
checking accounts and by what is
claimed to be superior security they
attract deposits to the extent OF sew
eral million dollars. BY treating
them Just as state banks are treated
In the matter of taxation and giving
them the same privilege of exemption
on loans placed at five per cent or
less within the state, neither class or
| banks would be favored or disrcimi-
mated against
hn nrnufoinn NJ
would exempt only "loans of record,
by which we mean any form of inter
est-bearing loan, the existence and
bona fide nature of which are shown
beyond question by proper legal re
cord filed with the town clerk when
and where made. This provision
should go beyond notes secured by
mortgage on real estate and chattels
so that personal notes, such as banks
accept and discount, might be record
ed, and thus receive the benefit Of
the exemption. We would limit tn,
exemption to loans so recorded, il
order to prevent fictitious transac
tons designed to abet tax lodging
Loans made to corporations, munich
pal or private, secured by bonds Of
otherwise. should be open to the ex
emption, when duly recorded.
To the objection, sure to be urged
that the proposals here made woul,
Cypress the banks and cut down thu
fixed incomes OF their depositors, no
only by subjecting them to heavie
state tax, but by encouraging indiy
idual loans, we reply that whateye
disturbance in these directions woul,
take place seems called for in orde
to restore healthful economic condit
ions. Banks have become a necess
ity and steps like those propose
would by no means put them out O
business. In nine cases out of ter
the borrower prefers to deal with
bank. rather than an individual whe
he can do so on even terms. At tn
| same time. 1t is not best to establIs
a condition where personal loans ar
out OF the question. The change
proposed, we believe. would tend /
widen the scope OF money lendint
reduce the interest rate and brin
benefit primarily to the class tina
need 1t most, the borrowers.
Money sent out OF the state 1
: loans or investments. either by bank
or individuals. would not be open I
exemption, as would that placed wit
In the state at FIVE per cent or lesl
Thus we should put home lendln
/, and home investment at a premium
| where now II Is fact that foreign IL
yestments have a slight advantag,
The effect should be a plentitude {
money for the development OF We
mont, at rates within reach of thos
who want and need il.
= As to the effect on the state trea
ury, 1t would doubtless cut down III
corporation tax revenues to the q
tent OF the loss at the present seyel
tenths per cent rate OF whatey,
was realized at the increased rate
one per cent on the aggregate
loans In the state placed at mol
than five per cent, and whatever W;
sent outside the state The net lol
could not be heavily affected.
' present substantially no money
\ returned as such for local taxatio
Even mortgage notes are not large
held In private hands. Exemptir
Il personal loans would make but vel
little difference in town tax revenue
: One other advantage this plan HI
over the fiat rate on all intangible
a large proportion of intangibles a
not money, nor evidences of mon,
loaned at interest. but consist
shares OF stock representing lnve,
n ments in various enterprises. The
are generally taxed now to the own
= where he resides. at the local raj
q Giving him the benefit OF a low A
10 rate is a species OF governmental
% vor that stands without adequate d
Y fence. II would merely deprive toy
r grand lists OF a much needed ass,
, TO the personal advantage of I
5 stock holder only. Take nation
bank Stockton instance II is ne
taxable locally Give IL a low Il
ts rate instead and who profits? T
- holder and the bank whose shaI
n are enhanced In value II is not
public benefit, but exactly the OPT
site. since the tax loss must
made up by others. Now II Is es
mated that about one-fourth of
the intangibles that would come
der the fiat rate consist OF natloi
bank stock. We see, perhaps, "
y certain class OF wellto-do peol
~ are making no cutlery over the po
Utility Of low rate on intangible
Another change we would favor
T. either the repeal outright of the st
ute fixing the legal rate of inter,
Mt six per cent, or its amendment
that any rate not exceeding six |
cent shall be legal. as fixed by I
- parties to the loan, or, In absence
agreement, by the court, II necessa
The present fixed interest rate,