The Washington times., 1917-01-15
Amend Sterling Bill to Exempt
Mortgages or Deeds Of Trust
on Realty, They Ask.
OTHER RECOMMENDATIONS
Would Relieve Banks of Double
Assessment on Mortgages
and Bonds.

With the recommendation that it
be amended to provide that mortgages
or deeds Of trust on real estate In
the District shall not be liable to any
tax under the provisions Of the act,
the Commissioners sent to Congress
today report on the Sterling bill for
the assessment Of. intangible prop
erty.
Such taxes, the Commissioners say,
ultimately bear upon the borrower
and are burden to buyers of small
homes.
Other Changes Urged.
They recommend also that the bill
be amended to provide that banks
liable to tax on earnings and capital
stock shall not be required to make
any report or pay any further tax on
mortgages. bonds. and securities
owned By them.
Concerning the justice of an in
tangible tax they say that experts on
taxation are agreed generally as to
the tmpossibility OF q fair eQualiza-
ton and thorough collection of such q
tax.
The Sterling bill is designed to su-
persede the present law for the as
sessment of intangible property.
CommissiOners' Report.
Following is the Commisioners' re-
port:
The personal tax law of July 1,
1902, taxing banks and trust COM
panies s per centum on their gross
earnings which is greater than a sim
liar tax in most States, and also
greater than the tax here on public
utilities, would seem to be sufficient
without q tax on bank balances and
Individual holdings of stock.
This act further taxed public sery-
ice and quasi public service corpora
tions in an amount high enough to
make 1t unnecessary to tax individ-
ual holders of stock.
The tax on mortgages and deeds of
trust on real estate ultimately bears
upon the borrower, and Is a burden to
those buying small homes. Taxes on
loans can be and are easily shifted to
me borrower, with the result that the
mortgagor pays on both the real es-
tate and the mortgage. The Commits
sioners believe that there is even bet
ter reason for the exemption of mort
cages than for the exemption Of bank
deposits.
No Fair Equalization.
Concerning the Justice of a tax on
Intangible personal property, it may
Be said that experts on taxation are
generally agreed as to the impossible
ity Of fair equalization and q thor
ought collections tax.
I'm addition to this it may be said
that revenue by such q method is not
needed a. Il can be raised with great
er equity In other directions.
Coming to still more recent ex-
periences. It IL interesting to note the
fact that after years of honest at
tempts to tax intangible personal
property. the State of Massachusetts,,
has by legislation abolished that par
ticular form Of taxation and substi-
tuted In lieu thereof State tax upon
incomes based on the lines Of the
Federal income tax, at the same time
retaining the tax upon general prop
erty and tangible personal property
with certain exceptions and exemp-
tions, 50 as to avoid the feature Of
double taxation Of any class or
classes Of property. -
"Inasmuch as the bill under consid-
GRAFTON provides for a committee to
study the tax laws Of the District OF
Columbia, the Commissioners only
recommend at this time that the most
Questionable features In the bill be
eliminated, which may be accomplish
ed by the following changes: Insert
in line 9. page 8, before the word
corporation . the words banks and; :
and insert at the end Of line Is, page
3. the words and provided further,
that all mortgages or deeds OF trust
on real estate in the District Of CO.
lumbiS shall not be liable to any tax
under the provisions OF this act"