The Birmingham age-herald., 1923-03-04
MISLED AS TO TAXES

by statements purporting to show that the taxation rate of this state is higher than thao of other states, notably North Carolina, and that our legislatures repeal of tax-exemp- ton laws affecting water power compaNlea will have a deterrent effect upon the estab- sisment in Alabama of industries now legally allowed exemption. It is noteworthy that the argument is applied affecting cotton mills, which enjoy exemption In neither State.
 There is no doubt that North Carolina has an admirable system of taxation. Those who would propose a similar code for Ala bama, moreover, would be advocating total tax greater than now is levied. It IS idle, however, to compare tax rates of the two states, for Alabama levies an ad va loren state tax, while North Carolina does not have such state tax, but leves tribute on incomes, not only of individuals, but of in- dustries, and not only on net incomes, but also on gross incomes above a given sum. It has been incompetely stated that Alabama 1evies state tax of sixtyfive cents hun dred dollars. Alabama allows an assessment of sixty per cent. of fair and reasonable value, and then makes collections 10 an amount not to exceed sixty-five cents for each hundred dollars of assessed valuation, which is only thirty-nine cents on each one hundred dollars of actual value. As matter of fact, as MT. Kilby once stated, the actual state collections have not amount ed to much more than twenty-five cents per one hundred dollars.
 North Carolina collects a tax on all in- comes of individuals amounting to more than one thousand dollars for unmarried persons or persons without dependents, and more than two thousand dollars for married persons or those with dependents The tax is one per cent. on incomes up to S2,500; one and half per cent. on the excess of all incomes above $2,500 and up to $5,000; two per cent. on the excess of all incomes apovc $5,000 and up to $7,500; two and half per cent. on the excess of all incomes above $7,50O and up to ten thousand dollars, and three per cent. on the excess of all incomes above ten thousand dollars. On industries there is tax of one-tenth of one per cent. On gross incomes, and tax of three per cent. on all net incomes. Thus it is per ceved that the North Caro,ina tax ranges -from one dollar to three dollars per one hundred dollars of income over and above certain specified exemptions applying to individual incomes. Students of the tax system of the two states are convinced that the North Carolina system, if applied to Alabama, would result in far greater reve- nues than are collected under the present system.
 ,s This rather general criticism of Ala bama's tax system and of the alleged un- friendly attitude of the legislature towards capital, which has been somewhat indulged Tn 4 by the Alabama press cannot fail to have bad effect upon the minds of those who might be considering the state a basis for industrial operation. The worst of it is that the criticism is not based on a sound premise.
 '1' Several papers, for example, have quoted the Charlotte, N. C., Observer to the effect that ''the trouble in Alabama seems to be a concerted determination to repeal the law under which temporary exemption from tax alton is given new industry. The law was passed to encourage development of Ala bama's resources in waterpowers. Only a fraction of the capital necessary was available in this state, and inducement to outside capital was imperative. Waterpower projects were made tax-exempt during their Construction and during the period required fo put them in working order and in pay ing condition"
 If the quotation had been directly suggest cd by the power companies, it could not bet ter have argued the private case as against the public interest, nor could it have more resolutely ignored certain pertinent facts. For example, the inference that seems gen orally to have been taken from the editorial Otioted above is that North Carolina grants exemptions and Alabama takes them away. Nothing can be further from the truth, North Carolina has had no tax exemptions on cotton mills or other major industries since 1868, while in 1921 her legislature repealed all remaining corporate tax ex- emptions in the following language as con- tained in Section 5 of the Revenue Act of that year: Whenever in any law or act of Incorporation, granted either under the gen eral law or by special act, there is any limi- tation or exemption of taxation, the same is hereby repealed, and all the property and effects of all such corporations, other than bonds of this state or of the United States government, shall be liable to taxation ex- rcept property belonging to the United States and to municipal corporations and property held for the benefit of churches religious societies, charitable, educational literary or benevolent institutions and orders, also cemeteries" This should effectually dispose
 AL IL. 4y.- -bama is more unfrendly to new industry