Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-06-14

law, up to 90 per cent of the Fed
eral tax
AS passed by the House, the bill
required adoption of the Statewide
system Of pooling all employer con-
tributions Senator Harrison ex-
planned in his opening speech that
the Senate committee has allowed
States the option Of adopting either
the pool system, or the Wisconsin
plan Of permitting the individual en-
ployer to set-up reserves for unem-
ployment payments to his own work.
ers.
Individual Plans Backed.
Although States are allowed to
adopt the individual company reserve
plan of unemployment insurance,
there is no provision in the bill as it
came from committee by which the
Social Security Board could permit
industries that have their own old
age retirement systems TO adhere to
those systems in preference to the
national plan. Several Senators have
indicated they are working on pro-
posed amendments that would allow
the board to make such exemptions,
provided an individual plan is found
to be at least equal to or better than
the standards prescribed for the Ma
tion-wide plan.
The old-age annuities resulting
from the contributory tax would be
based roughly on the amount of salary
taxed, Harrison explained, but pro-
vision Is made for adding something
to the pensions in cases where small
salary or a short period of contribu-
ton would result in very small re-
tirement allowance. Harrison de-
scribed the formula as follows:
THE annuity is SIS per month for
the first $4,000 in salary for which
tax has been paid before the employe
reaches IS, plus about 80 cents per
month for each additional thousand.
up to $45 900, plus about AZ cents per
month for each thousand over $4,000,
with the further provision that no
pension may exceed sS5 per month.
Example Case.
For example, take the case of
person whose average salary is 500
per month, retiring at the age Of IS.
His monthly pension would be:
"$1T50 where he paid taxes S years.
"s22.50 where he paid taxes 10
years.
"s42.5O where he paid taxes 20
years.
"s42.5O where he paid taxes 80
years.
"$51.25 where he paid taxes 40
years"
With the self-supporting Federal
system in existence, Harrison argued,
the cost by 1860 for State old-age
gratuity pensions would almost GER
tainly be less than 81 900, 000, 900. This
system, therefore, would mean a saw
ing of over billion dollars a year."
Pay Roll Tax Defended.
In defense Of the employers paw
roll tax which is intended to induce
the States to enact unemployment in
surance laws, Harrison said individual
States have hesitated to adopt unem-
ploymept insurance because it would
place their industries at a disadvan-
tage unless the other States had SINH
lar laws. The unemployment in
surance pay roll tax would start at
per cent for 1886 payable in Janu-
airy. 1890: 2 per cent for the second
year and per cent thereafter.
The contributory old-age annuity
system and the unemployment insur-
ance section are financed by these
special taxes. The remainder OF the
social security program calls for Fed
eral grants to the States. with appro-
priationS for the first year as follows:
Old-age assistance Ito pension those
who are too old to join in the indus
trial contributory SYSTEM, $49,75o,-
600; for aid to dependent children,
$24, 750, 900; maternal and child
health, s3,S00O00; for crippled chill
dren, s2.S50,coo; child welfare. ST.
500 600; vocational rehabilitation,
$841 ,0o0 public health, $4,000 900,
and aid to the blind, 100000.