The Daily Alaska empire. [volume] (Juneau, Alaska) 1926-1964, 1936-04-16
Old-Age Pensions
New York TimeS.)

New York Times)
/ The provisions and implications of the Social Sc
rity Law have not yet been brought home to the
average He will be compelled take active
interest in them in less than year, when more than
half of the workers in the United States will be
obliged to pay tax upon their wages salaries to
support Federal pension plan. Meanwhile students
Of the problem are concerned about the probable
working out of this contrbutary od-age program.
One Of the causes of this concern is the total tax
burden that it would impose; the other is the huge
reserve that it would build up.
Beginning in 1887 the 25000000 workers estimated
to be covered by the contributory plan will pay
annual tax of per cent on their average wage
salary tthough not than $4,000 of it, if it is
higher, while their employers will pay equal tax,
making per cent tax in all. These taxes will
gradually be increased until in 1949 the rate will be
per cent for the worker and per cent for the
poyer, or per cent IN ALL Pensions to begin
in 1912 AS taxes paid in will greatly exceed pensions
paid out-by an annual amount of $1,278,OOOOOO in
the year 1850, for eXample-there will gradually be
built up gigantic fund which, according to
the estimates of the Senate Finance Committee, will
reach approximately SAT 100000 by 1890
1t is provided that these funds to be invested
solely in securities of the United States Government
in those fully guaranteed by it. But the govern
ment debt direct and guaranteed at its present
unparalleled level is less than $4,000 000 000
are these securities to from? Should have
situation in which, instead of reducing public
debt matter of sound finance, should have to
increase it in order to provide securities the pen
sion fund?
Most critics of this provision have talked about
the unmanageabity of this huge fund and its bad
effect in reducing the national purchasing power
during the years in which it being built up But
Mr. Albert Linton president of the provident Mutual
Life Insurance Company, who served as actuarial
counsel to the Committee Economic Security which
prepared the original draft of the present believes
that the real danger is of another kind No fund
he tells in article in The Atlantic Monthly will
be built up The program for the Congresses
the next thirty years to practice denial by in
vestng hundreds of millions each year in a reserve
fund mounting into the tens of billions belongs in the
realms of dreams" The voters and Congress, having
understanding of actuarial principles will become
convinced that something must be wrong as they see
the special tax receipts yearly exceeding pension
payments and building up reserve; they will demand
more liberal pensions and probably reduction OF
the eligible age of CO. The result would be place
an unbearable pension load on the future.
Mr.. Linton believes that the whole theory OF
placing the contributory od-age pension plan upon
a alphabetically "self-supportng" basis is unsound
and unnecessary The actuarial principles that apply
to individual companies apply to the country as
whole. One absurdity of the plan as it stands is
that the interest" this fund at per cent is
expected to reduce the future tax burden" imposed
by the pension plan But this interest" must be
paid by the United States Government to a branch
Mr. Linton suggests that the practical way ou,
per cent of q per cent on the worker and
per cent the employer) to stand until it appears
an unbearable pension load on the future