Evening star., 1939-03-25

eH p n &c
proves later necessity for change"
But the American businessman
knows by experience already what
a devastating effect present pay roll
taxes have had, and he knows,
moreover, that these taxes are not
essential to the payment of unem-
ployment insurance or old age pen
sionS.
AS matter of fact, the actual
expense for the present plan of old
age insurance for the 10 years from
1888 to l948 would require only S1l2,-
100000 year. Unemployment in
surance payments in the year 1888
year of heavy unemployment
amounted to only little more than
S400,00O,OO0
Saving of Per Cent.
Thus this entire expense of about
$5l2 900 900 could be derived from
pay roll tax of only per cent and
both employers and employees could
be relieved of the present tax of S
per cent-a saving of per cent.
This would amount to more than
$700,000000 a year. Likewise the
use of that sum of money in the
purchasing power of the Nation. in
the next few years especially, would
contribute materially to recovery.
1t is. as Senator Vandenberg, who
has been agitating the subject of
unnecessary reserves, says, "the
healthiest thing that has happened
IN long time" that the adminis-
tratlon has publicly indicated it's
Willingness to revise the system. But
the revision does not go far enough.
To offer the American people the
proposition that an already bad sit
uation will not be made worse is
scant comfort, especially when the
present tax burden arising out of
the pay roll tax is clogging the
wheels of recovery. Evidence galore
has been accumulated and congress
slonal committees can easily get it
showing that the pay roll taxes now
or the statute books, and which it
is now proposed to keep there, are
interfering with the increase of en-
ployment.
Imaginary Expenditure Cut.
1t would be most unfortunate if
the headlines gave the impression
that there is to be an actual cut
IN pay roll taxes. 1t is reminiscent
OF what some administrations used
to do here with respect to economy.
Estimates would be prepared far
and above what it was intended to
have the departments spend, and
then it would be announced with
great fanfare of press hullabaloo
that economies" had been effected.
The only thing that had been cut
was an imaginary expenditure. And
that's what is happening with re-
spect to the pay roll taxes Indeed,
1t is not yet clear that there will
be any abandonment of the increase
in taxes on pay rolls, as only post
ponement in the next few years has
been recommended.
What American business needs
Is complete revision of the pay
roll taxes and a curtailment down
to 2 per cent. which is ample to
take care of all sound requirements.
1nequities in the law which penalize
high-wage industries as well as
those provisions which permit a
business with seven employees to be
exempt and its competitor with
eight employees to pay the full tax
have been brought to the attention
Of congressional committees by
trade associations, but without re-
suit.
1t may be that the recognition
by the Roosevelt administration of
the seriousness of the whole pay
roll tax problem will wake up the
legislators in Congress to the fact
that they are really the ones to
whom the country has been looking
for relief from taxes. Somehow or
other the Congressman still wait
for the Executive to tell them what
their duty is when, as Chairman
Eccles of the Federal Reserve
Board pertinently pointed out, it
Is Congress which has the conSti-
tutional duty to levy or repeal taxes.
Copyright, 1899