Saturday news. (Watertown, S.D.) 19??-19??, 1913-05-08
Of Mortgages
IS Double Taxation

The tax commission seems deter
mined to tax mortgages. After 9 few
gear trial of this plan, the penpleaof
the state win reach the same conclu-
sion that other states have already
arrived at, and that Is that the tax
alton OF mortgages Is double taxation,
and that the borrower is the n who
pays the tax.
The Mitchell Republican learns that:
the tax commission has received
many letters from farmers IN the
state, urging the commission to tax
farm mortgages. The writer's of the.
letters argue that they have to pay
taxes on their land and that the mon
ey loaner should not escape. PERHAPS
if the farmers of the state really in
sist on paying an additional tax other
people should not object. And it may
be that the only way the people
OF the state can learn that a tax on
mortgages is a tax on the man who
is in debt is to personally experiment
with it. This the Byrne tax commits
sion Intends to do. 1t will not be two
years after the experiment is tried
that it will be abandoned, and this
will put an end for years to come to
the demand for the taxation OF mort
cages.
The Republican hits the matter OH
nicely when 1t says:
1T is not easy to understand how
even those who are least informed
could be so short-sighted as this. II
farm mortgages should be taxed n
South Dakota, the entire burden Of
that taxation would fall upon the
farmers of the state, upon those who
are borrowing none with their farms
as collateral. The current interest
rates of 6 and Z per cent on these
mortgages are based upon non-pay,
ment OF taxation. If taxes are to pc
paid, the amount would be added t.
the interest rate, Why? Simply be
cause most Of this money comes from
outside the state and the rates quoted
are such as are paid elsewhere with
out taxation, The farmer who mort
cages his land OF course pays taxes
on all the land. Then if he must pay
taxes on the mortgage also. he is sub
jected to double taxation on the am
cunt represented in the mortgage
How would the farmers Of the STATE
like this? Why are they clamorine
for an addition to the burden of tax
alton they already pay?
Probably a great many Of these
borrowing farmers do not know that
the mortgages they sign are sent oul
OF the state. The firms that hands
farm loans are all agents or brokers
They find a market for these loans
receiving their compensation in the
form or a commission. The borrow
ers probably Imagine that all the
mortgages they handle are stored u
their safes. But il they were to maxi
an examination, they would discove,
very few of them. If these mortgage
should be made to pay taxes, it woul'
mean simply that there would be NJ
longer any market for them. AM
the farmers of the state could whistl
for their money.
sof course the law provides tina
mortgages shall be taxed and g
course the commission is not going i
say that the law should not be er
forced. Just the same 1t is abso
lutely true that not a single state j
the union has ever succeeded in maa
ing mortgages pay taxes the same a
any other property. That demon
strates first of all that it is impossible
to discover items for taxation an
secondly that the tax is in itself VI
just and wrong in principle"