Evening star., 1939-05-06
THE EVENING WASHINGTON, c., SATURDAY,
House Unit Approves
Liberalized Benefits
Of Security Law
Also Fovors Reducing
Tax Burden Under
Present StipuIotions
By the Associated Press,

By the Associated Press.
The House Ways and Means Com
mittee completed its long study Of
proposed changes in the Social Sc
cWity Law yesterday and stamped
its approval on a variety of revisions
designed to liberalize benefits and
tighten the tax burden the law i'm
poses.
In addition, Chairman Doughton,
Democrat, of North Carolina, an
nounced the committee had agreed
to recommend creation of a special
trust fund for old-age insurance
taxes which would be administered
by three trustees-the Secretaries Of
the Treasury and Labor and the
chairman of the Social Security
Board.
Taxes paid into the fund would be
earmarked for old-age insurance, Mr..
Doughton said, but they could be
loaned to the Government, as at
present.
The special trust fund was recon-
mended by Secretary of the Treasury
Morgenthau.
Bookkeeping Procedure.
Under present practice the old
age taxes, currently per cent each
on employees and employers, are
listed as general receipts on the in
come side of the Federal ledger. Then
an approximately equal sum Is
charged to the expenditure side of
the budget as transfers to the old
age reserve account"
In effect, money from this account
is loaned to the Government to pay
its general expenses.
The effect on the budget of the
change proposed yesterday would
be to make both income and ex-
penditures appear smaller, without
changing the deficit.
The old age tax Is scheduled,
under the 1885 law, to go up to
~ per cent next year, but the COM
mittee also has recommended, with
the tacit approval of the Treasury,
that the rate be frozen at per
cent for the next three years.
r4VOTS lS4V f6ymcntS.
Among other changes the COM
mittee has approved is a formula
for lowering the unemployment
compensation tax and a system of
starting old age pensions in 1910,
instead of 1912. Certain of the pay
ments would be liberalized.
A last minute change decided
upon, Mr.. Doughton said, would
give general relief to delinquent
taxpayers under the unemployment
compensation provisions of the law.
At present. employers are taxed
per cent of: their payrolls by the
Federal Government for unemploy-
ment insurance. If they pay State
unemployment insurance taxes,
they are entitled to credit them
against the Federal levy up to so
per cent of the latter. provided they
make the State payment prior to
January 81 each year.
Considered Too Harsh.
Mr.. Doughton said the committee
considered this too harsh and voted
that taxpayers who were in arrears
on their l936-7-8 State taxes
would be allowed to take the stipu-
lated credit on their Federal tax If
they paid their State taxes prior to
the Goth day after enactment of this
proposal.
In future. the committee recon-
mended that employers get full
credit If they pay their State taxes
prior to January 81 but lose only 10
per cent If they pay before July l.
That will be a big relief for de-
linquent taxpayers" Mr.. Doughton
said.
Early in its deliberations the COM
mittee decided against extending the
acts benefits to agricultural and
domestic workers, but Mr.. Dough-
ton said it was indefinite as to
whether seamen would be included