Evening star., 1935-06-21
The Unemployment Bill.

senator h1ng mas appOllVcu cuD-
committee to study the Ellenbogen un-
employment insurance measure for the
District and Mrs. Norton's bill for aid
to the needy aged. both of which have
passed the House and both OF which
are designed to supplement the national
social security legislation on its way to
conference between House and Senate.
The Ellenbogen unemployment mSur-
ance measure should receive the close
study of this subcommittee before It's
report to the Senate. 1t would be better
If this report could be postponed until
final enactment of the national legisla-
tion. For the local bill is based gener-
ally on the national legislation as u
passed the House. The Senate liber-
allied the national legislation in several
particulars, and the Senate revisions, Ii
they stand in conference, permit wise
improvements in the local measure.
AS it passed the House the local I'M
employment bill levies three per cent
tax on pay rolls in the District ana
requires, in addition, contribution equal
to one per cent of such pay rolls from
the general funds of the District. inis
imposes, effective next January, tax
burden which, on the basis of estimated
employment in the District in 1880,
would amount to about $4, 600 an
nually. There is, in addition, the Fed
eral nay roll tax, which begins at one
per cent and gradually attains three
per cent. But credit of ninety per
cent of the Federal tax is permitted
those who pay the local tax.
The amount of revenue needed to
finance this measure is matter OF
guesswork. The need depends on eco
nomic conditions affecting employment,
but the revenue raised under the meas
ure is calculated to take care of more
than a normal amount of nemploy-
ment. It would be wise policy, In view
of the Districts manifest shortage OF
revenues at this time, to eliminate from
the measure the proposed appropriation
of $75O,O0O from general revenueS-tor
the first half of the next fiscal year
and to experiment with the sufhciency
of the revenues yielded from the three
per cent tax on local pay rolls.
The requirement written into the
local measure for a contribution from
the local government amounting to one
per cent of all private pay rolls is m-
usual. The New York State law, for
instance, requires no such contribution.
1t is bad policy to collect this relatively
heavy sum from the Districts general
revenues until the need is fixed and
certain, and it is by no means fixed
and certain now. The Senate Commit
tee should eliminate the requirement for
a contribution from the District gov
eminent, other than an amount repre-
senting three per cent of the municipal
pay roll for per diem employees. who
are covered by the bills insurance
features. This would be about $4,000
The Wisconsin unemployment act
pioneer among all such experiments in
the United States-permits each en-
ployer to build up unemployment re-
serves. When such reserves have
reached a stated sum per employe the
employer receives the benefits OF pay
roll tax reduction The Senate, in pass
ing the national measure, permitted
States to adopt the employer-reSerVe
plan, as well as the plan under which
all employer er-eontributions are paid into
a common pool.
In the District bill the pool method
is provided. Mr.. Ellenbogen attempted
to include a merit clause, under which
employers, successful in stabilizing their
employment would be granted some tax
reduction. But as the bill passed, the
employer who stabilizes his employment
receives no tax reduction, while the en-
ployer who does not stabilize his en-
penalty.
That is unreasonable and is mani
festly unavoidable. No sane employer
lays OF men for the fun of it. If the
employer who suffers business reverses
and is forced to lay men OF is to be
penal1zed in addition by further taxa
ton which increases his cost of pro-
duction, it is question whether he can
remain in business and hire anybody
The local bill has been called model
bill" and goes further than any State
measure in the amount of benefits as
well as the amount of revenue-rela-
lively speaking-to be raised. While
there has been no opposition from local
taxpayers to lis admirable objectiveS. the
Senate should be careful lest its provi-
sions prove unnecessarily burdensome.
Wealth must have in it an element Of