The Birmingham age-herald., 1913-06-28
MERITS OF TWO PLANS FOR
TAXATION ARE DISCUSSED
CONTINUED From Page Five)

| CONTINUED From Page Ffye)
| its recommendations for change in the
taxing system of Alabama, was postponed
until this meeting
| your committee reported that the an
nual income of the city of Birmingham
as compared to annual cost for current
| expenses, interest on the bonded debt, and
reasonable betterments showed a deficit
amounting to $433, ,S61 "a; and as a first
step toward remedying the citys financial
difficulties, your committee recommended
| the institution of a campaign over the
| state of Alabama to secure constitu-
| tional amendment changing the state sys-
| tenn of taxation, as to abolish the
| collecting of ad valorem taxes for state
purposes, thereby leaving to the counties
and cities in the state the entire revenue
from ad valorem taxes upon local prop
erty.
by such a change, your committee
believed that the income to the city of
Birmingham from taxes upon the real and
personal property within its limits could
be materially increased, without increas-
ing the total burden of taxes upon the
property assessed; and if it was found
necessary to increase the property taxes
for county or city purposes beyond the
amount which the property in the city
row yields to state, county and city to-
gether, tl-st the property owners would
more willingly consent thereto because
the increase would be applied to local
purposes alone. In short, we would be
relieved of paying to the state a pro-
portionate share of every increase in tax
alton and would be rid of the annual Wis
its of the state tax commission, and its
increased assessments designed for the
benefit of the state treasury rather than
for ours
"Fhe application of this plan which
tor t..I ,,a1Dtt ttaaf =
attention, was that in force in Call
fornia for the last three years by which
the real and personal property of in
dividua1s and of private corporations
is relieved of all ad valorem taxes for
state purposes and in exchange the
operative property of public service
corporations is relieved of all ad
valorem taxes for local purposes and
is taxed only on the basis of share
in the gross receipts of the corpora
tions to provide the revenues for the
state. In California this share in the
gross receipts of public service cor
porations, together with all corporate
franchise taxes and small tax on the
capital of insurance companies and
banks is sufficient to meet the total
requirements of the state-some $10,-
100000 in all. And based upon a hasty
perusal of our report, certain critics
have misquoted us as saying that the
revenues from taxing the public serv-
ice corporations would suffice to meet
the needs of the state treasury of Ala
bama. But such was not this commit
tees position. The total receipts of the
Alabama state treasury for the year
ending September 80, 1913. were &c.
261,236, of which SS,3S5,916, or little
over half, was derived from ad val
orem taxes upon property throughout
the counties of the state. And it was
this half. this $3,3S5,916, which your
committee reported should be raised
gross receipts of the public service cor
porations, insurance companies and
banks in lieu of ad valorem taxes upon
the property throughout the state,
thereby exempting the public service
corporations in return from paying any
local taxes upon any property used in
their corporate business. And your COM
mittee attempted to show that this
revenue could be collected from the
earnings of the public service corpor-
ations without increasing their burdens
beyond that borne by the property
paying local taxes throughout the state.
Not New System
THE system of taxing public service
corporations upon their demonstrated
earnings is not new by any means. 1t
has beeen in operation in Illinois since
the ante-bellum charter of the Illinois
Central Railroad company, as the sole
tax upon that corporation by the state
1t was early adopted by Maryland and