Evening star., 1934-12-16
TAX ON PAY ROLLS
APPROVED FOR lob
INSURANCE FUNDS
Advisory Council in Favor
Also of Optional Age
Pension Plans.
FEDERAL GRANTS ASKED
TO BUILD UP FINANCES
Concessions to States Backing
Programs Included in Ten
tative Set-Up.
BY the Associated Press.


An unemployment insurance system
resting upon contributions by en-
ployers through a payroll tax and
three optional old-age pension plans,
two of which would carry a Federal
subsidy, were approved yesterday by
President Roosevelt's Economic Sc
curity Advisory Council.
Mote: An article by G.. Gould
Lincoln, discussing sentiment at
the Capitol in favor of old-age
pension legislation, appears on
page 2.)
Persons thoroughly familiar with
the work of the council, but who de-
clined to be quoted, said the unem-
ployment insurance proposals to be
recommended to the Cabinet Commit
tee included:
The employer to bear the full ex-
pense of the plan.
The collection of per cent pay
roll tax.
Exercise by the Federal Govern
ment of a strong control over the
form of State insurance plans by the
payment of grants from this tax to
those States whose insurance plans
came up to Federal specifications.
Outline of Pensions Plans.
These persons said the old-age pen
sion program approved called for
three optional plans, any or all Of
which might be employed. They out
lined them as:
A compulsory plan under which the
States would pass law compelling
employers and employees to contribute
to an old-age pension fund.
A contributory plan by which both
employer and employe would pay into
a general old-age fund.
A voluntary plan under which the
employe would pay a specified
amount each month for regular in
surance that would care for his
old age
A Federal subsidy would help to
bolster the funds built up under the
contributory and compulsory plans.
In addition, the advisory council
adopted recommendations dealing
with disqualification.
It did not vote on proposals for
health insurance.
Wouk0 SOnttuuC "CldEC EAAus
With regard to child welfare, those
familiar with the course of the
councils work said that it proposed
q continuance of Federal child work
appropriations and aid for mothers.
Under the unemployment insurance
plan outlined by these persons, the
recommendations would follow closely
the lines of the Wagner-Lewis bill of
last year, except for the different
manner in dealing with the tax col
lected on pay rolls.
The Wagner-LeWis bill proposed a
pay roll tax, collected by the Federal
Government. 1t would have been re-
funded to those concerns which con-
tributed to State unemployment in
surance funds.
AS outlined, the new proposal
would have the tax collected by the
Federal Government and direct grants
would be made from it to those States
which enacted unemployment insur-
ance laws conforming to standards
laid down by the Federal Govern
Inent.
Government Control Sought.
The theory was advanced that the
grants would not only encourage the
States to enact unemployment insur-
ance laws, but would give the Federal
Government a stronger control over
the form Of insurance laws enacted.
The plan to have the employer con-
tribute the full amount of unemploy-
ment insurance has been favored 10Th
by William Green, president of the
American Federation of Labor, and
by Secretary Perkins.
The agreement was advanced that
since the workers made up about rs
per cent of the consuming public, if
they contributed directly to unemploy-
ment insurance they would have to
bear a double share of the burden.
This was based on the contention
that the employers would pass the
cost of the insurance along to the con-
sumner in the form of increased prices.