The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1936-11-19

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around constitutional objections, the
Social Security act provides for the fl
ancing of the old age annuity section
by an excess tax on employers and an
income tax on the individual workers.
1t was believed necessary to levy an
ordinary excise form of tax on the en-
ployer to avoid the legal contention that
he was being taxed to make payments
to another, and therefore having his
property confiscated for the benefit of
another class. That was one of the
grounds on which the Agricultural Adj
justment act was found unconstitution-
al by the supreme court.
Because of the different nature of
the tax on the employer and that on
the individual worker, the employer can
deduct the amount of his payments
from his normal income tax. However,
small proportion of the workers
covered by the act pay federal income
tax.
The annuity section of the law is a
compulsory one. The employe has nc
choice as to whether he prefers or does
not prefer to have tax levied on his
pay. All employees have the deduction
made, and, of course, matched with a
contribution from their employer.
All employees, however low their wage
are subject to the payroll deduction
The same rule is true at the very tor
range of the salary lists, except that
the highly paid executives of companies
can carry annuities only on the frs
SO 900 of their income.
In the A. B. c. Co., for example
everyone in the employ of the company
from President w. T. Blank down to the
lowest paid office boy, is subject tx
compulsory payroll tax deduction
President Blank, of course, pays only OF
the first $1,000 of his salary, while the
office boy pays on the full amount o.
his salary.
One of the interesting features of tht
act is the disposition of the funds pait
in by workers who for some reason
suspend their payments.
This is particularly interesting K
women stenographers and other youns
women working in business and in
dustry. A high percentage of Sucl
women workers quit their jobs after ;
few years to get married. Suppose .
20-year-old woman stenographer pay
her payroll tax for five years and thel
marries and quits her job. She canno
receive any part of the amount she ha
paid on her annuity until she reache
age IS. If she dies in the meantime
as high percentage of women do, he
heirs become eligible to her claims.
If an employee becomes unemploye.
for a time and then goes back to work
his annuity payments are picked vi
upon his return to employment but hi
annuity at age IS is reduced becaus
he missed some of his payments.
The Social Security act provides tina
the funds paid by employers and EN-
ployes in the form of taxes shall g
directly into the United States treasur
as internal revenue. But the intention
and the assumption is that these fund
will be set aside in trust funds for tn
benefits later to be paid out to benefici
aries in old age pensions. Funds paid il
under the unemployment insurance sec
ton of the act are returned by tn
federal treasury to the respective state
for handling.
The trust fund set aside by the treas
ury for old age pensions presumabl
will be similar to other special fund
held in trust by the federal government
such as the Federal Deposit Insuranc
Corps reserves, various Indian trus
funds and the civil service retiremen
fund.