The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1915-08-25
Senate Amendment Levies
Is Cents on Every $1,000
Capital of Corporations
CONSUMES MOST OF
DAY IN THE SENATE
Change Would Add Greatly to Tax
Paid by the Larger Railroads
and Other Corporations
of State

Montgomery, August 24-(Special1
Corporations doing business in Alabama
must pay a franchise tax of 70 cents
on every $1,000 of capital stock. If SEN
ate amendment to the revenue bill is
adopted by the house.
The fight on the franchise tax provi-
sion of the revenue bill consumed the
greater part of the day and brought on
the most heated and impassoned argu-
ment that has been heard in the senate
since the fight on exemptions.
As is known. the revenue bill as passed
by the house provided that the franchise
tax should be on a graduated scale. Cor
porations whose paid up capital stock did
not exceed $4,000 were assessed at the
rate of 81 per $1,000. Corporations above
$4,000 and up to S1.o00,000 were assessed
81 per $1,000 on the first $4,000 and SO cents
on each $1,000 of the remainder. Corpora
tions whose capital stock ran up as high
as $5,000,0oO were assessed 81 per $1,000 on
the first $4,000; 50 cents per $1,000 on the
next s96oooo, and rs cents for the remain
der. and corporations whose capital stock
exceeds s5,00O00O were assessed at the rate
of 10 cents per $1,000 on all above that
figure.
Fixes Dollar Rate
The senate committee on finance and
taxation, which reported the bill, amend
ed the section so as to provide fiat rate
of 81 per $1,000 on all the capital stock
employed Immediately the larger cor
porations began to howl, claiming that
the tax was excessive.
They commended that on a basis of 81
per $1,000 corporations with capital stock
of more than s500o,Oo0 would be compelled
to pay several times more than they paid
under the present law.
Most of the debate In the senate today
was on an amendment offered by Senator
Hartwell of Mobile making the rate of
taxation 80 cents per $1,000 instead of 81.
This amendment, after considerable de-
bate, was defeated by vote of II to IS.
Senators Lusk of Marshall and Hill of
Montgomery led the fight against the
ators Lee of Etowah, benson of Greene,
Hartwel of Mobile and Kline of CAL
houn contended for 1t.
The argument of the opposition was
based on the grounds that it is wrong
in principle to tax the poor man and
let the rich man go free. Senator Lusts
made frequent reference to the poor wild
ow, the man who plows with the one
eyed mule. and the humble laborer, de-
claring that the state taxed such per-
sons to the full limit while practically
exempting the rich men.
Lee Fears Amendment
Senator Lee made a vigorous debate in
support of the amendment. He showed
that s5.0Oo,00o corporation, under the
present system, pays franchise tax of
s1525, whereas on the basis of 81 per $1,000
that tax would be increased to 5000, or
$500 on basis of 80 cents.
He showed that the Louisville and
Nashville Railroad company, with $685.
100000 employed in Alabama. pays under
the present rate franchise tax of $4525.
whereas under dollar rate that tax
would be increased to $4,000 or s1750o
on basis of 80 cents.
That corporation will now be compelled
to pay, If the senate action is adopted, a
franchise tax of something over $4,000.
or nearly six tiS1es as much as it pays
under the present law
The amendment making the franchise
tax of corporations on basis of rs cents
on every $1,000 was offered by Senator
Kline CT Calhoun following the defeat of
an amendment by Senator benson fixing
the franchise tax at so cents per $1,000.
1t is believed that the senate amend
ment fixing the franchise tax at rs cents
will not be adopted by the house. al
though it is likely that the amendment
will cause lively fight I'm that body.