Evening star., 1939-04-17
BY JOHN H. CASSADY, Jr,

A pay roll tax on District en-
ployers OF ll2 per cent-just half
of the rate now required by law
would be sufficient to meet all de-
mands for unemployment compen-
sation and pay all administrative
expenses of the District Unemploy-
ment Compensation Board.
The authority for this statement
is John A. Marshall, director of
the local jobless insurance agency.
One years experience in paying
insurance benefits has convinced
Mr.. Marshall that the present 3
per cent tax on the eligible pay roll
Of Washington is greatly in excess
Of actual need.
To substantiate this contention,
Mr.. Marshall pointed to the fact
that during 1938-the first year in
which benefits became payable
some $6.000,000 was collected under
the 3 per cent tax, while the claims
for compensation in the same Pc
riod amounted to less than $2,OOO.-
600. In brief, then, the District
AAAA AAloAAltCo dG ldlC VI
than three times that of disburse-
ment.
AS of last December 81, he de-
clared, statistical breakdown
shows the District credited with
more than sl0,0O0,000 in the unem-
ployed trust fund. Collections dur
ing January, February and part of
March this year, however, have
raised the total above $1,000, 900.
Disbursements Lagging.
Under the present levy, taxes of
more than 100000 monthly are
being added to this sum. In Janu-
ary, the revenue amounted to $685.
900: in February, $652, 900, and in
part of March ,$606,OOO. BY con-
trest, disbursements this year, as
Of April 9, amounted to only 1898 900
less than one-third the amount
of collections.
Contending that these figures
show 1t is unnecessary to compel
local employers to continue paying
a 3 per cent tax. Mr.. Marshall
strongly indorsed the bill recently
introduced by Chairman McGehee
Of the Judiciary Subcommittee of
the House District Committee to
give the Unemployment Compen-
sation Board authority to lower the
rate of contributions to be paid by
employers as long as a balance of
approximately $10,000,O00 is MAIN
tanned in the trust fund to meet
claims.
The McGehee bill also proposes an
amendment to the Social Security
Act to separate the local compensa-
ton agency from the Social Sc
curity Board. In indorsing this pro-
vision, Mr.. Marshall explained that
complete separation from the Social
Security Board is the only method
by which local employers can be
relieved of the excessive tax.
independence Held Needed.
"As the Social Security Act is
worded," he explained. "the differ
ence between a lesser tax in the
District and the per cent required
by the national act would be paid
into the Federal Government. For
this reason it Is obvious that the
only way business in the District
can be relieved of this excessive
tax is by permitting the District to
set up and operate its unemploy-
ment compensation activities as an
independent agency, fixing its own
tax rate and paying its own ad-
ministrative expenses.
If this would be permitted" he
added, II am satisfied that a pay
roll tax of 112 per cent will be. sufl-
cient to pay all accruing claims, as
well as all administrative expenses.
Operating costs now are paid by the
Social Security Board"
At the present time, he said, the
law does provide a formula to be
applied after January /, l94l, by
which the rate might be cut as low
as is per cent or raised as high as
I per cent. depending on the en-