The Waterbury Democrat., 1936-10-23

for example, will have 20 cents de- ducted from hls envelope each week Later 30 cents will be taken from the $2O-R-week employe, then 4C cents, 50 cents, and, when the aci is in full swing, SO cents each week Those receiving higher or lower wages will be taxed accordingly. The tax will also apply to and be de- ducted from any bonuses or extras Equal amounts are to be levied against the employer, these taxes being for old age pensions for cer- tain groupes.
 Pensions In '42
 As the act is now written, pen- sionS are scheduled to begin in 1942. The law, however, warns that: 'The right to alter, amend, or re- peal any provision of this act is hereby reserved to the congress" It is not an enforceable contract, such as an employe would have against any insurance company to which he paid premiums, for such an insurer would be forced to pay, regardless of war or any other calamity.
 The deduction for the first year from the pay envelope of the em- ploye will amount to half weeks pay. With the tax increasing every three years, when the 3 per cent tax (the maximum) is. levied, begin ming with the year 1949, the total de- ducted in 12 months from the pay envelope will amount to one and a half weeks pay.
 Employers Taxed
 Employers will be taxed an equal amount, although a large portion, if not nearly all, of the employers tax will eventually be paid by employees through increases in the cost of living. In addition to the tax for old age pensions, employers of eight or more persons must pay tax of 2 per cent on payrolls during 1897 and three per cent after 1897 for "un- employment insurance" The act does not specify just what the bene- fits under this section shall be, but states that 90 per cent shall be re- mitted in states having unemploy- ment insurance provisions suitable to the social security board.
 If the taxes are not increased by later acts of congress they will total nine per cent of payrolls by the time the present law is in full Swing-three per cent taken from the employe and three per cent talk en from the employer for old age pensions, plus three per cent levied against employers for "unemploy- ment insurance"
 Exemptions
 This will mean an ultimate an- nual drain on the city's payrolls of approximately $4,212, ,000, based upon Waterbury's present estimated week. ly taxable total payroll of $900, 0,000- which aggregates $46,800,000 for the year. This total does not include es- inmates for occupations not covered by the act, which exempts agricul- tural or casual labor, domestic ser- vice, state, municipal and govern ment workers, seamen, and enl- ployes of religious, charitable or ed- ucational institutions not organized for profit.
 Ultimate Total
 The ultimate total annual tax of $4,212,000 is, of course, subject to change with any change in payrolls. Economists are baffled, however, by the problem of estimating total pay- rolls even one year from now. Total employment normally increases gradually with the growth of the population, and wage and salary rates would ordinarilly increase with such improvement in business as might occur The problem is somewhat simplified by the fact that the tax against employers will, for the time being at least, practically prevent any increases in wages and salaries and discourage business. On the other hand it is impossible to judge the exact extent to which the drain on the country's resources oc- casioned by the social security act will operate to reduce employment or hinder increase.
 Merchants Concerned
 Local merchants. however, are suf- ficiently concerned over the prospect of even a $4,212,000 cut in the total possible yearly volume of retail trade. Figures for the state as a