The Bridgeport evening farmer., 1916-07-27

I.tnlS IS QlIef6nI rom a DOIlu. Iho | holder of bond cannot be said to | have loaned his money on interest," | he has bought 8 negotiable, interest
 bearing obligation, and has had noth- | ing to do with making a loan. It
 must be remembered also that mort
 gages securing bond issues are made ] to trustee for the benefit of the sev-
 eral holders of the mortgage bonds.
 The statute also requires CD an agreement that the borrower shall pay
 the taxes A great many bond issues
 make no such agreement. The stat
 ute also requires (3) that a mort
 gage >shall only be exempt up to an
 amount equal to the assessed value of the mortgaged land. There are very l few cases that we know of where the lmortgaged land-and especially if land be taken in it's literal sense as
 excluding machinery, fixtures, etc., is anywhere near equal in it's assessed Ivaluation to the amount of bonds out | standing We see, therefore, that such bonds fail to square with the provisions of the statute exempting
 mortgag ges from q taxation, and we think that in any event, if all other considerations were left out, they could only be regarded as non-taxable
 in such ratio as the assessed value of | the mortgaged land bore to the amount of bonds outstanding. We offer this only as a suggestion, how ever, and not as an opinion, because | our best opinion is that the bonds must be deemed taxable, and we are
 at liberty to say that the entirely per
 sonal and unofficial opinion of Tax Commissioner Corbin agrees with ours. It must be borne in mind that the tax commissioner is not court, land has no right to render any official j or binding opinions, but Tax Com missioner Cerbin has been kind
 enough to discuss a great many of these matters with us-he always in sisting, however, and we concurring that his opinion is informal and per
 sonal purely and has no official con-
 clusiveness. AS an individual opin-
 ion, however. it is a pretty good one, and we feel that in all probability a court decision would sustain our posi- ltion. It is quite possible that we
 may arrange to mako a test case along the line of some of the debatable items which we have discussed in this
 treatise. and if we do so. we shall be
 in position to speak with more fin-
 ality than at present about this and
 other classes of bonds l Another class of bonds that needs
 attention is the class which is issued 1 by real estate, investment and title
 companies, secured by collateral pledge of first mortgages in this state.
 Claim has been made that these bonds
 are based on first mortgage security
 and conform entirely with the statu-
 tory provisions about the assessed val
 uation of the property being equal to
 the amount of bonds outstanding,
 about the agreement of the borrowers to pay the taxes. etc. We under
 stand. however. that the tax commits lsioner's office has taken the position
 of demanding from an estate where
 some of these bonds were found the lpenalty-tax assessable under the law
 of 1915; and thereby practically reg listering the bonds as taxable.
 We think-we have covered and clas- sified practically all of the taxable
 securities. Tn word. they may be
 defined as being all securities which are not non-taxable. The words l s'not non nJtaxable'' furnish an excellent lNlustration of the old rule in gram ] mar that two negatives make an afflr- mative.
 The law relating to the taxation of securities in Connecticut had practi- cally been. dead letter until the law lof 1915 was passed, which required
 an inventory of ones estate to be fur 1 nished the tax commissioner, and caused him to make inquiry and as- lcertain whether taxes has been paid
 on the taxable securities in such es- tate during the year preceding de- fcedent,s death. And If it appeared that taxes had not been 90 paid, a tax of 20 per cent. must be assessed l on the market value of such securities as had escaped taxation to relate back five years prior to the death, or such portion thereof as it might ap- l pear that such untaxed securities had
 been in the estate.
 I This was intended as drastic law
 and so 1t has certainly proved to be We mentioned instances of it's opera tion at the commencement of this treatise, and we have many more ir mind, where comparatively small items have been assessed for tax fol Il five years prior to the death of the owner. Let 1t be remembered tha, this tax of per cent per annum k very stiff compared with the ta1 which person may pay in his life.
 time oh securities. A penalty against an estate has provided a very practi- cal way of enforcing the law, and the average holder of securities is now lmuch more concerned with tho tax
 question than he was few years ago Some seven or eight years ago, wher we spoke of taxation to one wealthy and eminentc itizen, he jokingly threw
 up his hands, and said: 'The least of my troubles" He does not think so now. The law has stood for many year. l. that a person owning securities may send the same, or a description
 thereof. to the state treasurer, ant pay tax of 4-10 of one per cent. or the par value thereof, which tax shal cover one year from the time of it. , payment and shall be in lieu of othe, taxes on such securities. It will be ! noted, that the new law fixing securi. | ties found in estates on which no ta1 , has been paid, charges not 4-1O pel i, cent. of one per cent. but full two , per cent. although the two per cent. is ] lon the market value, whereas the 4-1C per cent. is on the par value, Assum. ling a security to be worth par, how. ], ever, the penalty provided for non. |, payment of taxes is just five times the ! ordinary tax. We know of severa
 instances where decedents' estates have had to pay this full ten per cent penalty, and their surviving relatives