The Bozeman courier. (Bozeman, Mont.) 1919-1954, 1922-11-08

"The farmer is certainly as much
entitled TO tax-exempt securities as
anyone else, but if all tax exemption
could be done away with and the
farmers bonds placed on an equal
basis with other bonds, he would be a
gamer thereby and not a loser"
The eagerness of wealthy investors
to buy bonds that are tax-free has
encouraged states and cities into ex-
travagant bond issues.
Encouraged by investors who de-
sired to evade heavy taxes, and by
the earnest belief that they were get
ting the money below the market
rate, states and municipalities have
put out large issues of bonds for
public improvements not immediate
ly necessary, and in some cases con-
structed at excessive COSTS" says E.
ID. Chassell, farm mortgage banker
OF Iowa. 1.-THE bond issues of 1920 at
an average rate of five per cent. adj
ded an annual interest burden of tax
alton TO American property Of $685.
683,199.30. The bond issues of 1921
increased this annual tax burden $685.
293, 445.80 more.
ITO take care of this interest
charge, American property in 1922
must CARRY a tax burden more than
sos. 100000 heavier than that of
1919.
But that is only a part of the
debit account; persons who will be
subject to an income tax of so per
cent Of their income a sell their
property producing taxable income
and buy the tax-exempt bonds yield
ing this income of $1G3, 0OO, 900 a year.
They would thus evade the payment
OF sol 100000 annually which other
wise would be paid into the national
treasury. This tax shortage must be
made up by adding $51 1900, 900 an
nually to the federal taxes paid by
lines of business which cannot evade
payment.
1.-THE total additional burden thus
imposed upon American tax-payers
by the state and municipal bond is
sues of 1920 and 1921 IS made up OF
these two items: $103, 600, 900 annual
interest paid on bonds and S51 500, 00C
THE FARMER - Galley TWO
5i--w IF mo,roa ,.tcgonoa ne-b1. buc
annual loss to the national treasury
through tax evasion by owners of th'
bonds. This is a total annual burder
OF $l54,5OO, 900 added to the alread;
heavy load carried by American pro
perty and American business in two
years. What will it be in 10 years!'
The money that goes into tax-fre,
securities cannot be used for business
OF farming. That is why we Sc,
cities and states carrying on extensiv,
and often extravagant programs O.
public improvements at times whel
farmers and business men can hardly
get the credit necessary to keep thei
business going. da
In a recent letter one Of u read
ers, j. E. Jensen of Iroquois county
ILL.,, says:
9" just read that a New Yorl
syndicate has bought as million dol
lars worth of four and O half pc
cent securities in one lump. Why j
it that securities like this sell abov
par value while farmers have to pa,
six or seven per cent for money!"
/, The facts about tax-free securitie
given in this article answer Jensen
question. 1t is harder than it ough
, to be to get money for business an
farming, interest rates and taxes ar
( higher, all because of the flood c
! tax-free bonds that are crowdin
! other investments out Of the marke
and enabling rich investors to escap
paying taxes.
The only way out is through a cor
I stitutional amendment. This will tax
> time, and will not affect the tax-tre
bonds now outstanding. But they wi
gradually be paid off, and if we sto
issuing more we vol be going in tn
: right direction instead of piling u
more trouble. Such an amendmer
( should be adopted at the earliest pos
sible moment.