Evening star., 1936-01-01
WORK INSURANCE
PLAN IN EFFECT
IN NATION TODAY
Benefit Payments to Start
in 1888 by Additional
Capital Tax Levies.
FEDERAL ASSESSMENT
DUE NEXT JANUARY |
Complications Develop to Hinder
Exact interpretations Of
U. S. Regulations.
BACKGROUND

DHChOnOCND-
Economic and social security
against needs arising from old age
and misfortune Wds one OF the most
effective promises made by Demo-
Gratis in directing 1882 campaign
for presidency.
As result, one OF early acts OF
President Roosevelt Dds to name
committee to study such legiSld-
tion. On August II. 1885, President
Roosevelt signed Wagner-LetUis bill,
omnibus law embracing nine sepd-
rate programs directed at improU-
ing future OF less fortunate classes
of people.
Unemployment compensation Das
major part OF this composite pro.
gram. Federal Ian, designed to
islation, lepies tdres, prouides for
credit in tares paid to State funds
and for administrative grants to
such States.
Effective today, America begins its
greatest attempt to smooth economic
ills resulting from unemployment.
Part of the omnibus social security
program enacted during the last ses-
sion of Congress, the Federal taxa
tion features of the unemployment
compensation plan becomes effective
today. In addition, in eight States
and the District of Columbia. local
taxation provisions become applicable
with benefit payments due to start
January /. 1888.
Although complications in applica-
tion of the taxing provisions in the
Federal act have prevented compile
tion of the tax regulations, it is
established that actual payments OF
the Federal tax will be required after
January l, 1887. on the basis of this
years pay roll figures. Only employ
ers Of eight or more persons are sub
ject to this levy and certain occupa-
tional pursuits are exempt. The tax
rate during 1896 is per cent OF gross
pay roll.
While four Of the States and the
District Of Columbia provide by law
that employees should not be forced to
contribute to the tax, the Federal law
does not prevent such assessments in
other cases, except that it makes the
employer liable for the full amount.
Fear Wage Handicaps.
Concern already has been expressed
/ by labor leaders that employers will
follow a universal practice of deduct
ing part Of the tax from wages. In
theory, increased prices likely TO result
from application Of the program are
expected to draw sufficiently from the
employe-consumer, and it was on this
basis that the District law and others
exempted employees from direct taxa
ton.
The eight States with laws already
In effect are Alabama, California.
Massachusetts,, New Hampshire, New
York, Utah, Washington and Wiscon-
sin. Since the Federal tax falls upon
all 48 States, with direct return or
credit being extended only to those
having State laws. others are ex-
pected to fall in line rapidly.
Although the Treasury Department
has prescribed the form of records
employers must keep for a check on
their tax. regulations which will aid
in solving the many questions of
exemption claims are not expected
before January Is.
Compensation Funds DeductibIe.
When paying the Federal tax. an
employer may deduct the amount he
has contributed to State or district un-
employment compensation funds up to
80 per cent Of the total amount of his
tax.
The social security act, under which
unemployment compensation as well
as old-age pension taxes are levied
specifies agricultural labor, domestic
servants, officers and crews of vessels
persons employed by their children
and children under 81 employed by
their parents, public employees and en-
ployes of non-profit institutions such
as churches-are exempt.
However, experts drafting the regu-
lations have run up against such OBJ
stacles as determining exactly what
agricultural labor is. Some have raised
the question, for instance, whether a
nurseryman is an employer of agri-
cultural labor.
Others have wondered whether all
servants can be classified as domestic
servants. Another problem is the
question of tips paid to walters and
mattresses.