Evening star., 1936-10-28

pay roll deduction. Here is the text
of such a notice sent out by one COM
pany:
ITO employees:
lone per cent (19e) will be with
held from your salary, commencing
January /, 1887, in compliance with
the Federal social social security law
passed by the Congress of the United
States and approved by President
Roosevelt August IA, 1885.
Your check or your pay envelope
will be short 1 per cent each week
during 1887, unless you are 65 years
of age or older. If your salary is
more than $4,000 a year, deductions
will cease after / per cent has been
collected from $4,000. This money
is to be turned over to the Federal
Government. together with similar
amount paid by the employer, to be
applied in accordance with the pro-
visions of the social security law ap-
plicable to old-age pensions.
Increased Tax Cited.
1.-The / per cent deduction applies
to the years 1887, 1888 and 1899. In
1910 it is increased to i Il per cent Of
your salary and in 1943 to 2 per cent.
In 1916 it increases to 21a per cent
and in 1949 to 8 per cent. In each
instance the employer must pay q
similar amount The payment of
old-age pensions begins in 1912"
The extent of the effect of the
pay roll tax controversy can hardly
be estimated. It may upset all polls
of votes that have been made. It
may assure New York State for Lam
don and some Of the Middle Western
States as well. For it tells, in single
concrete measure, the whole philos-
ophy Of New Deal policy Of expert
mentation, in disregard Of constitu-
tional safeguards.
Even the New York Times, which
announced recently its support Of
President Roosevelt for reelection,
had this to say editorially yesterday
of the social security pay roll tax:
Perhaps its greatest single defect
and danger Is the provision 1t makes
for building up . colossal reserve
fund which is expected ultimately to
reach $50, ,000. 900 ,00O-far in excess of
the present total national debt. Ex-
perts believe reserve of this sort Is
potentially dangerous and wholly un-
necessary.
Delay Of Benefits . Factor.
Another defect Of the law, in the
opinion Of some authorities, is the
postponement Of benefit payments.
After five years, for example, it will
be taking in each year 16 times as
much as it Is paying out. At the end
of 10 years, it will be taking in five
times as much as it is paying out.
This suggests that the workers will
in time resent having these taxes de-
Quoted from their income while they
see so little being paid out and a huge
and untouched reserve fund growing
constantly larger"
But more important still, in nv
opinion, Is what kind of investments
will the Federal Government make
with its reserve fund.-" It will be
compelled by law to invest In Govern
ment bonds, which means that the
creation of national debt "for public
works" and "boondoggling" will be
constantly encouraged till the point
where the citizens will wonder wheth-
er the reserve fund" can ever be paid
OF except by printing press money
and an imitation that will make the
proceeds buy very little. For high
prices always result when too much
public debt Is created and when cur
rency becomes less and less valuable
in terms Of goods.
The pay roll tax controversy has
come late. The law was passed in
August, 1885. The Republicans have
been asleep st the switch. They had