Evening star., 1938-05-05
PAY ROLL TAX CUT
APPEARS DOOMED
Underestimation in Number
OF Possible Beneficiarjes
Is Disclosed.
BY JOHN C. HENRY.


Underestimation of the number of
persons who may eventually establish
claims for old-age insurance and
favorable consideration being given
suggestions for further liberalizing the
eligibility requirements OF claimants
appeared today to be booming hopes
of any reduction in the pay roll tax
levied for this purpose.
Applicable at the present time at
the rate of l per cent on employe
and per cent on employer on total
wages covered, the tax rate is scheduled
to increase gradually until it reaches
total OF per cent after 1948
The disclosure Of an underestima-
tion in the number of potential bene-
ficiaries from the insurance program
was made yesterday afternoon by
Chairman A. j. Altmeyer of the
Social Security Board in announcing
that 100000 old-age accounts al
ready have been set up, as compared
to an estimated maximum of &C.
rather than the estimated figures, he
said, there will be approximately
175,000 persons receiving old-age an
nultieS from the Government fund by
1912 and as many as 100000 by
1880.
The weight being given to pro-
posals for liberalizing the eligibility
requirements is due largely to the
fact that President Roosevelt has
made such recommendation,
Cut in Taxes Opposed.
The entire subject of revising the
tax rate was reopened yesterday when
Chairman Altmeyer released a letter
to Senator Vandenberg, Republican,
of Michigan, informing the Senator
that the board and the Advisor
Council on Social Security were in
agreement that no reduction in the
current tax rates under Title VIII
of the Social Security Act should be
made at this time"
The Michigan Senator had urged
reduction of the tax rate on the
grounds that needlessly large re-
serve is being built up and that the
tax load is repreSsive to business
Instead, he proposed. the system
should be put on pay as you 60
basis with contingent reserve only"
AS part Of its decision on maintain
ing the present tax rate, the council
also took occasion to defend the prac-
tice of investing the funds of the Old
age reserve account in special Govern
ment securities paying per cent in
terest
By the terms of the Social Security
Act, the old-age tax collections are'
paid into general funds of the Treas
ury from which they are subsequent
appropriated by Congress into tt
special old-age reserve account. Il
turn, the funds in this account az
invested in the special Governmc--.
securities.
Funds Declared Safe
"The members of the council" ther
statement said, regardless of diferi.i~
views on other aspects of the fnancirc
OF old-age insurance, are of tn
opinion that the present provision
regarding the investment of tt
moneys in the old-age reserve accou~
do not involve any misuse of the.
moneys or endanger the safety {.
these funds"
Indicating that they plan q more
conclusive report later which Chair
man Altmeyer said probably would
be filed before the end of this year.
the council conceded that it "recog-
nizes that there are other ways Of
financing the old-age insurance sys-
tenn which upon further study may
prove to have greater advantages than
the present system
BY the present system, it was pointed
out. receipts of the old-age tax cur
rently are being made available for
other Government purposes, thus cut
ting down the amount of public bor-
rowing and the public debt
The council which is making this
important study is composed of six
prominent leaders of labor, six in
dustrial executives and - representa-
tives OF the public. One of the latter.
DR.. j. Douglas Brown of Princeton
University, is chairman.