The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1913-02-20
THE FEE BILL.
Something About the Proposed
Mortgage Fee Law.
Which Exempts Mortgage In
yestments From Taxation.

This Legislature in common with
predecessors has before it a bill to ex-
empt mortgage loans from taxation
anG substitute registration tax fee.
As the bill is made a special order
in the house for Friday reference to
1t is pertinent and careful considera-
ton important
Never before was money so availa Die
to the deserving borrower. Kansas
offers good field and prime security.
interest rates on farm loans are as
low as in the older states of Illinois,
Ohio, Indiana and Iowa.
why should we radically change our
laws in this respect? Why should in
vestments in loans be exempt from
taxation rather than investments in
merchandise, manufactures or real es-
tate? Why should a heavy loss of
revenue be brought about by substi-
tuting a fee for taxation?
These are some of the pointed ques-
lions that are asked by those opposed
to the bill.
Kansas lenders who have Kansas
money to loan say they are taxed
while the eastern money lender es-
capes. The other side to this is that
no property should escape it's share of
taxation and the eastern money pays
its taxes in its home state.
The opposition to the bill makes its
strong points on a big loss of revenue
to the state and an apparently in
creased rate to the borrower, in the
face of a present satisfactory situation
to the borrower, With abundant capt.
tai seeking Kansas loans at moderate
rates.
A man familiar with conditions asks
the mem berS of the Kansas legislature
to weigh the following which he pre-
sentS in opposition to the fee bill:
Both political parties had a clause III
their platforms, last year, faVoring a
registra ton fee bill. Some of the leaders
low know
why the clause was inserted Some peo-
pie have notion that the request came
from a few people in Kansas who invest
their surplus money in real estate loans
THESE parties claim that they can no.
loan their money in competition with
cheap money furnished by eastern IN
vestors and pay tax on their mortgages,
also that it would be double taxation.
Let's see about that.
For instance, farmer owns $50 acres
of land worth $1,000, has $4,000 mortgage
on it. He not only pays tax on his equlty
of 5000 but on the full value of the farm
covering the mortgage as well. The
double taxation is against the borrower
instead of the money lender.
To an ordinary layman it would seem
that people who have money TO invest in
Kansas mortgage. are able and ought to
be willing to pay their taxes on the mort
should be the borrower instead of the
lender. If the registration fee bill is
will have the fee tospay. That is general
ly admitted by the friends of the bill So
the borrower in addition to paying the
tax on the full value of the farm which
includes the mortgage would have to pay
a higher rate of interest. Men who have
money to invest in Mortgages are in bet
ter shape to pay their Just share of tax
alton than the farmer vfe1has the inter- i
ece to pay on his-ldan in addition to his
taxes. zi49
Kansas farmers are not asking for this
law. They are; satisfied with present IL
terest rates. which, are as low as those of
any other state in the Union
D.
erly enforced, on many accounts one OF
the best and fairest tax laws that was
ever placed in our statute books Prior
to the enactment OF that law nearly ali
the Kansas mortgages escaped taXatlon-
In 1907 there were only about S4.000D0
mortgages on the tax roll. The first year
alter the law was passed, 1905 something
over s47,OO0.G00 real estate mortgages wes c
placed on the tax roll. That amount h AS
increased until in 1912 there We're a little
over s65, 100000 real estate mortgages on
the tax roll. which produced a revenue
to the state of 1857, 10 as shown by the
report of the state tax commission.
The state tax commission approx
of this state at $500 100000 There arc
probably less than s90,0O0.O00 in mortgages
made in Kansas in any one year. Assam
ing that there will be $50 100000 mortgages
made annually a registration fee of So pei
thousand would produce revenue of
only $l5OOo0 per annum instead of 1861 10
under the present law. making a deficit
of little more than half a million dol
lars annually. What source this deficit
in the revenue to the state will be mace
up from is problem that you should fig
ure out before eXempting mortgages from
taxation. Also whether you can, with
any degree of propriety, enact a law that
will be a burden on the borrower causing
him to pay an extra regiStra ton fee ai.d
increase his taxes to make up the said
deficiency of over half a million dollars