The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1938-03-01
NEWSPAPERS OPINIONS
AN AID TO RECOVERY

AN AID ~ KESONENi
Out of every $1,000 of payrolls in American
business comes $40 in taxes to pay for old-age IN
surance. If this were actually necessary IN ofueF
to assure the future security Of the worker thefe
would be bubble with it.
But competent life insurance executives, actu-
aries of the Social Security board and members oil
the Economic Security committee which laid the
groundwork for the present law have counseIed
that the United States safely pledge the same
schedule of retirement benefits to workers with
much smaller initial tax and more gradual lmpo-
sition of the tax Senator Henry Cabot Lodge, Jr
therefore has introduced amendments to the Soclal
Security Act, the most Immediately important OF
which would cut in half the present payroll taxes
for old-age benefits President Roosevelt himself
acknowledged a year ago that these taxes and the
reserves they would build up are unduly high he
indicated they would be scaled down, but thought
there was no hurry about it.
That was before there had been any business
recession The period since has been serious con-
traction of opportunities for employment, and one
contributing factor has been the necessity of in
dustry to absorb suddenly this per cent tax
one-half its own account and One-half out OF
the employees pay envelope. The result in case
after case is that the employer has felt obliged to
let some worker go IN order to pay the tax on the
rest. In other words that unemployed man is pay
ing by the loss of his job the future cash benefits
for his fellow employees who keep theirs
The Economic Security committee sought to min
imize or avoid this effect by having the tax begin
at only one-half of per cent each for employer
and employee and to be increased after every hVe
wears instead of at three-year intervals as now
ordered.
DIR. E. E. Witte, executive director for the COM
mittee, explained that this would not provide
strictly and technically selfsupportng reserve plan
but would provide q reserve by 1860 Of approx
mately $4,000, 100000. After 1850 1t would be
necessary for the government to contribute sum
rising ultimately to perhaps $4,000 600 year
in order to maintain the out-payments, but the
committee held that in doing this the government
would merely be paying interest on the amounts
the fund had earlier furnished in "unearned" bene-
fits to participants. These benefits would have re-
duced the charges on the government for relief and
helped to bridge over from gratuitous old-age as
sistance to old-age insurance.
This is sound on three scores. First, in most
foreign countries where cOntributory old-age IN
surance exists, the government makes contrlbu-
ton to the fund Second, from the fact that there
is no form of tangible wealth that can be stored
so long or in such quantity as to pay these annul-
ties their payment depends in effect upon the earn
ing capacity and good faith of the succeeding gen.
Grafton anyway. And third government can al
ways be assured by law of new crop OF contribu-
tors every year, and hence need not provide re-
serve against possible falling off in sales of new
insurance.
From practically every point of view it is desir-
able that the pay roll tax rates for this phase Of
social security should be eased off temporarily
This being so, there could be no more desirable or
more helpful or more appropriate time for reduc-
ing them than By making the cut retroactive
to last year and crediting ahead the sums already
paid, business could be given complete breathing
spell from these payments for some months To
turn back several hundred millions of dollars into
the channels of production and consumption within
the next year would be neat contribution to bus-
ness recovery.-Christan Science Monitor.