The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1939-05-18
A. F. fl. Opposes Any Cut In PaYroll
Tax for Unemployment Compensation

Washington, d. ca strong pro-
test to reduce the three per cent Fed
eral tax on payrolls to provide an ade-
quate unemployment compensation
fund for the benefit Of millions of job
less in the United States was contained
in letter sent by President William
Green of the American Federation Of
Labor to Chairman Robert L. Dough-
ton and the other twenty-four men,
bers of the House Ways and Means
Committee
Emphasizing the admitted fact that
| benefits now paid to the unemployed
are far below the amount necessary
to maintain decent living standards,
Mr.. Green presented unanswerable
arguments in favor Of maintaining
the present tax rate and providing
more adequate compensation for the
millions Of working men and women
who are thrown into the unemployed
army through no fault of their own.
The text of Mr.. Green's letter fol-
| lows:
"The American Federation Of La
Dor is concerned about the proposal
that the Federal tax of per cent on
payrolls under Title TX of the Social
Security Act should be reduced.
at is only the uniformity of the
| Federal tax which has encouraged
States to enact unemployment COM
pensation laws and to build up funds
from which benefits could be paid.
'If the Federal tax is reduced, few
States would be able to resist the
pressure from employers to equalize
interstate competitive conditions by
reducing their taxes to the level of
the lowest State, or to the new low
level established by the Federal law.
"The effect on the funds and benefit
systems would be disastrous.
"ln many States any material re-
duction in the tax rates now would
make it impossible to pay even the
existing scale of benefits. No State
is paying benefits which by any rca-
sonable standards can be considered
satisfactory
"No reduction of rates should be
considered until more adequate bene-
fits are adopted and have been paid
for long enough period of time for
the effect on the funds to be certain.
Standards Are Too Low
"The present low standards of bene-
fits, proposed in Federal draft bills
used by most States in framing their
own laws, were never considered ade-
quate. They were proposed in the
belief that they were the utmost that
could be paid if the tax rate were 3
per cent.
Half the members of the Commit
tee on Economic Security which draft
ed the Social Security Act believes
that the tax rate should be higher.
at is unreasonable now, after only
one year Of benefit experience and
with inadequate benefits, to reduce the
tax.
Benefits must be substantially
raised before any change in tax rate
should be considered.
We strongly urge you to vote
against any reduction.
Gone OF the recommendations of the |
Social Security Board for amendment i
Of the Social Security Act was that |
the unemployment compensation tax
provision be combined or made idcn-
tical with those of the old age insur-
ance which relate to employers in or
der to simplify record keeping and re-
porting.
Larger Employer Covcrage Urged
"Speclfically two recommendations |
were directed to this end:
"The Board recommends that the
present Federal restriction to employ
crS who have had or more employees
iii 20 or more weeks during the year
be eliminated SO that the unemploy-
mCnt compensation provision would |
cover all those having one or more
employees, just as in the case Of old
age insurance.
1.-THE Board recommends that the
Federal payroll tax in connection
with unemployment compensation be
limited to the first $4,000 Of annual
wages, if that maximum is retained
in the oId-age insurance tax prov-
Sions. Though the Board recognizes
revenue somewhat, it believes that
that such 4 limitation would reduce
this advantage would be counter
balanced by the advantages to be de-
rived from making the Federal tax
provisions identical for both pro-
grams