The Birmingham age-herald., 1919-07-20
Analysis ofProposed Income And
 Excess Profits La,u For Alabama

persons. Before the war such thing as so-called excess profits taxation was never thought of In all the de. bates before Congress in hich the original excess profits tax law was dis cussed in 1917, the existence of state of war was the sole and controlling ar. gument in favor of the imposition of this very unjust and unequal tax Both of our United States senators, Hon Oscar W. Underwood and Hon. John H. Bankhead, opposed the adoption of this excess profits tax law by the federal government to the full extent of their ability. Both of them made extended speeches against the bill on the floor of the Senate. Mir w G. Mc- Adoo, Secretary of the Treasury at the time of the adoption of the existing United States revenue bill, went out of his way to say that the system of ex- cess profits taxation was absolutely unjust and created absolutely unfair and unequal burdens of taxation, and the same opinion has been expressed by many prominent men in President Wilson's administration. Doubtless Mr. McAdoo had in mind the fact that the people hardest hit by such taxation are the little fellows and not the big con- cerns. It is a fact that this system Of taxation is best designed to keep the rich man rich and the poor man poor, and the whole result of such a system of taxation is to kill ambition and to destroy initiative and individuality. The people of the state should know these things and be the judges of them before their representatives in the leg. islature vote on this bill.
 The income tax provisions in the bill as now drawn provide for the payment n ha a to ip ad f0a an ofla .}a ta county and municipal taxes (after an all lowance of sl,o0o in the case of a single man and S,000 in the case of a married man, with additional allowance Of saOO each for dependents), of per cent of the annual net income up to 5000, thai is $1o0; 21s per cent of the next s2,50O, tha. is s62. 50; per cent of the next $2 800, that is $75; 31 per cent of the next 5000, that is $175, and 4 per cent of any balance The same graded rate of income tax is provided to be paid by corporations, bu: IS the bill Is now drawn, the amount up- on which the corporation shall pay in- come tax is the difference between the net income of the corporation and tha excess profits tax required to be paid by the corporation to the state and to the United States.
 In the case of an individual the state , excess profits tax under the bill as now
 
 income before computing the amount O. the tax, and as there is no excess profits tax on individuals under the federal law. of course, there can be no similar deduc- tions for an individual on account of federal excess profits tax. There is no fair and reasonable way of correcting this, so long as any excess profits tax is retained.
 NEW YORK TAX LAW
 5l. To. A by the state of New York provides for a rate of only 1 per cent on net incomes up to s10,0O0. and a maximum rate of 5 per cent, which does not begin to apply until the net income exceeds So0,O00. The state of New York did not eve9 consider an excess profits tax. and in the case of corporations assessed flat rate of Az per cent, a rate perhaps not excessive when it is considered that corporations doing business in New York are, as a whole, the largest and wealthiest in the country are nearly all old and we'll established business concerns in a sec tion of the country whose resources have been fully developed and which are not met with the competition with older, wealthier and better advertised concerns in all lines of business with which all of our southern enterprises are met. But such rate when applied to Alabamascor- pOTdlioHS io CAti oihSiJ S1NSSs'S- York draws income from every state in the union, and from the world at large. We all borrow from New York. But Ala bama is endeavoring to become self-sus- taining by attracting investment, not driving it away. Our corporate industries are in their infancy and require encour- agement. No such excessive rate VIII accomplish this purpose.
 The first thing for you to consider IS whether you are satisfied with the rates proposed to be fixed by the state ieeisla- ture Remember that all of this is in addition to the tax which you must pay to the United States
 If you own property. and must pay the state county and city taxes on that property, you must also, nevertheless. pay this income tax. The business man who pays his tax on his store ana she