The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1935-08-22
President Roosevelt
Signed Security Bill
Employers and Employees Event
ually Will Be Taxed Three
Per Cent on Wages

President Roosevelt signed the
social security bill into law late
Wednesday evening, August 18th.
The bill, which the President
said would apply to 30,000,00 per-
sons, provides for contributory old
age pensions, federal-state PEN
sions for the aged needy, a federal
state unemployment insurance
system, special care for dependent
children and mothers. It contains
huge tax program to raise the
funds.
Under the bill employers and
employees eventually will be taxed
3 percent each on wages up to
$1,000 annually to provide for con-
tributory old age pensions Bene-
fits range from SO to $S5 a month.
The plan becomes operative jan
uary 1, 1887 but no pensions will be
paid until January 1, 1912.
The bill also sets up a federal
state unemployment insurance
system to be finaced through 8
percent payroll tax against en-
ployers of eight or more persons.
The employers would get credit
for payments made to state unem-
ployment insurance systems. The
credits could not exceed 80 per
cent of the federal tax. The taxes
start Jan. I, 1896.
An appropriation Of 100000, 900
is to be made by the federal gov
eminent next year to provide for
old age and grants to the blind,
crippled children and needy moth
ers.
In addition, the government will
offer grants Of SIS month, to be
matched by the states, for needy
aged not cared for under the con-
tributory pension system. An ap-
preparation for $40, 7500O0 for the
current fiscal year is authorized
for the purpose.
Administration spokesman esti-
mate that the unemployment in
surance and old age sections would
apply to 25,000,000 workers.
This is what the old-age annuity
section Of the social security bill
would do to and for the twin Doe
brothers:
The two-John and Jim-will be
80 on January /, 1887, the date that
section becomes operative. Both
have jobs paying them $500 a
month.
In 1887, 1888 and 1889, they will
nav q 1 percent tax on their salar-
ies-a total Of ST. each for the
three years. After that the rate in
creases gradually to a maximum OF
3 percent beginning in 1910.
John Doe keeps his job and con-
tinues to make an average Of 5000
a month until he reaches 65. At
that age, he has paid $1,152 to the
government, and his employer has
paid a like amount. John Is en-
titled to a monthly pension OF
$6625.
His brother Jim, however, has
not been so fortunate. He remain
ed employed only 20 Of the IS
years. In those 20 years, taxes were
paid on $4,000 Of income.
When he reaches IS, he gets a
pension just the same. He Is en-
titled to monthly pension of one
half Of 1 percent Of the first $4,000
of his total salary plus one-twelfth
of percent Of the remainder-a
pension of SIS plus $3.50, or a to-
tai of $3.50 each month.
The monthly pensions to both
continue until their deaths.
When they die the balance due
them, IL any, goes to their heirs.
Under the system, the smallest
possible benefit Is lump sum pay
ment of $3.50 to person who
paid taxes for 5 years on a $25-a-
month salary. The biggest Is an
SS5 pension to an individual who
earns $3.50 a month for As years.