Evening star., 1940-04-17
ConlproniseBi||
To Cut Job|ess
Tax Is Offered
Board Of Trade Head
Indorses Experience
Roting System
BY JAMES E. CHINN.

Liberalization of the local unem-
ployment compensation law is one
matter on which there is 100 per
cent unanirnity Of opinion among
taxpayers, Lawrence E. williams
president Of the Washington Board
of Trade, today told the judiciary
subcommittee of the House District
Committee.
As spokesman for 81 organiza-
tions, including the trade board, Mr..
Williams made a plea for law revi-
sions that will reduce the pay roll
tax of employers and at the same
time provide additional benefits to
the jobless.
The subcommittee has under con-
sideration two bills to liberalize the
present laW-one sponsored by Rep
resentative McGehee, Democrat, of
Mississippi, the chairman; the other
by Representative Ebeharter, Demo-
crat, of Pennsylvania Both meas
ployes' pay roll tax from 3 to 2.7
ures would reduce the present en-
per cent and raise benefit payments
to the unemployed.
Compromise Suggested.
Mr.. Williams suggested that the
subcommittee give consideration to a
compromise plan-a plan approved
by all employers of the District, he
said, as well as the Central Labor
Union and a committee composed of
. majority of the local Unemploy-
ment Compensation Board This
plan, he pointed out, provides an
experience rating system as an in
centive for stabilization of employ
ment
Testifying before a crowded room,
Mr.. Williams said:
"Mr. McGehees latest bill provides
for an entirely different method of
reducing taxes. It is a method
which, am frank to say, is entirely
acceptable to all District of Colum-
bia employers who are concerned
with tax reduction. At the same time,
would be remiss in my duty if I
did not say that the plan ignores
completely any incentive for stabil-
ization of employment. Unquestion-
ably the total amount of taxes COL
lected in the District of Columbia
during the next several years under
H. r. 9218 (Mr. McGehee's bilD,
would be less than would be COL
lected under the experience rating
system. 1t places all employers on
the same basis without regard for
their unemployment risk"
Slight Adjustments Asked.
Mr.. Williams turned over to the
subcommittee the draft of bill con-
tanning changes in the present law
which were recently approved by the
employer groups. the Central Labor
Union and the Unemployment
Compensation Board. Before leav-
ing the witness stand he declared:
District taxpayers are not oppos-
Ing substantial liberalization. They
are willing to support provisions
similar to the most liberal benefits
IN the rest of the country. They do
request the Congress, however, to
adjust slightly a few items which
they believed are somewhat out of
line with generally accepted prac-
tices and principles"
The witness pointed out the un-
employment compensation benefit
reserve fund now exceeds $4,000
and probably will increase to more
than $20,000000 at the close of the
year under the present system.
1T is" he said, "the highest ratio
Of reserves to benefits in any juris-
diction in the United States. The
freezing Of this large sum of money
is injurious to the economic welfare
of the District of Columbia, for it is
all productive capital syphoned out
OF private enterprise which would
otherwise 60 into wages or other ex-
penses."
Would Keep Experience Rating.
District employers, Mr.. William
declared, strongly oppose" features
OF the proposed legislation that
would abolish provisions for an ex-
perience rating system scheduled to
become operative January / next,
and added:
Two plans have been suggested,
however. which would be acceptable
to local taxpayers. The first of
these plans is the Texas system of
experience rating which is now in
the laws of Texas, Massachusetts,,
Illinois, Delaware and within the
last so days in Virginia"
He explained the Unemployment
Compensation Board is in position
to place the Texas system into effect
in the District next January /. This
plan, he declared, provides an in
centive to prevent unemployment.
Under it, he explained, the en-
ployers' pay roll tax would vary
from one-half of l per cent mini
mum to 81 per cent maximum.
Sidney R. Katz. secretary-treas-
urer of the Maryland-District In
dustrial Union Council &C. I. o.,
Endorsed the Eberharter bill.
IS Minimum Held Too Low.
He called particular attention to
differences between the McGehee
and Eberharter bills. One of these
Is that under the McGehee bill the
minimum weekly benefit payment
would be IS and under the Eber-
harter bill 81.
The IS minimum, Mr.. Katz argued,
obviously is based ION the lowest
living standards in the cheapest
living communities"
~ '"The District of Columbia, as we
, al know" he said, "is an extremely
high cost Of living community and q
81 minimum doesn't begin to be un-
reasonable"
p" Reserve Not Yet Tested.
"The District of Columbia has not
yet had any experience with the
drain that would be made upon its
reserve by liberal law such as pro-
vided In both the McGehee and
Eberharter bills" he declared.
ITO propose a fiat horizontal re-
duction at this time would make it
more dificult to secure passage of
this legislation because of varying
opinion and methods used by other