Evening star., 1935-11-24
SECURITY ACT TAX
BEGINS IN JANUARY.
Accountants Told How Cost
of Applying New Law
Will Be Met.

Speaking on the Social Security Act"
before Washington Chapter. National
Association of Cost Accountants, at
their last meeting. A. B. Gunnerson,
member Of the United States Cham
ber of Commerce, explained that the
income for administration Of the act
will be derived from new direct and
indirect taxes upon business, becom-
ing effective in part on January l.,
1896.
Beginning at relatively low rates,
these taxes will increase by success
sive steps for period of 13 years.
when they will reach a maximum of
per cent of all wages or other
remuneration of employees for unem-
ployment benefit purposes and 3 per
cent of such remuneration up to $1,000
for old-age annuity purposes. In
addition to the taxes specifically
levied upon employers, there will be
direct taxes levied upon employees.
Employer to Collect Tax.
The employer will act as tax COL
lector for the Government, deducting
the amounts due from remuneration
of employees. The unemployment tax,
described as an "excise tax" is pay
able by every employer, with a few
exceptions, who regularly employs
eight or more persons, while the old
age benefit tax is to be imposed upon
all employers coming within the scope
Of the act who employ one or more
persons. Both taxes are to be used
for the creation of huge reserves
from which old-age annuities will be
paid.
The act contemplates the main
tenance of this reserve on An ac-
tuarial basis through additional ap-
preparations by Congress. Comment
ing upon what may be expected in
this respect, Mr.. Gunnerson reminded
his listeners that recent audit of the
United States Civil Service employees
pension fund revealed a contingent
liability figured on an actuarial basis
of $1,500, ,000,0 900, while the assets
totaled only one-third of that amount.
The speaker stated 1t has been esti-
mated that the Government will re-
quire the services of 10000 additional
employees to administer the act and
keep individual earning records of
some 100000 people.
Following Mr.. Gunnerson, E. Bar
rett Prettyman, corporation counsel
for the District of Columbia, described
the requirements of the District un-
employment compensation act. He as
sured his listeners that this act, which
affects $4,000 persons employed In
the District, will be administered in
q way which will place as little bur-
den upon employers as is possible
to comply with the law.
Rules Are Due Soon.
The board plans to have ready for
distribution by January, a complete
outline of requirements, ETC., for the
guidance of business men Of Wash.
ington. The District of Columbia act
levies a tax upon employers of one
or more persons of per cent upon
wages or other remuneration of en-
ployes in 1896, 2 per cent in 1887
and per cent thereafter until 1941,
when the rate applicable to any
employe will be based upon his past
unemployment record.
]. A. Marshall, director of the Dis
trict of Columbia Unemployment Com
pensation Board, participated in the
open forum discussion and reassured
his audience that his board would
cooperate in every way possible with
employers In an effort to reduce to
a minimum the additional cost that
the employer must incur to comply
with the provisions Of the act. ;.