Evening star., 1940-04-19
Early Report
On D. {. Job|ess
Tax Is Seen
No Decision Reached
On Type Of Changes
As Hearings End
BY DON S. WARREN.


mittee of the House District Com
mittee, urging amendment of the
District Unemployment Compensa-
ton Act to provide increased job
less benefits and reduced payroll
taves, was held today when hearings
were concluded on different schemes
Tor changes.
The subcommittee considered the
form of the bill it will recommend
at brief executive meeting when
the hearings ended but no final de-
cision was reached. Since it was
found impossible to report the bill
In time for House consideration
Monday, District day, Chairman Nc
Gehee planned subcommittee
meeting later next week, probably
Thursday. He said he had hopes the
bill would be in shape for considera-
ton by the House on District day
two weeks from Monday.
There appeared to be general and
strong support for liberalization of
the act, both as to reduced taxes
and higher benefit levels, which
would limit it if not stop the polling
up Of the huge unemployment re-
serve fund, which reached $l7,534, 900
April l.
There was less agreement at the
hearing today on the type of changes
to be ~<dered, and there was no
early prediction as to what plan
would be recommended.
Texas Plan Urged.
Strong arguments for adoption of
the employer experience rating sys-
TEN, based on the Texas system,
which has been urged by spokes-
men for the Board of Trade and
numerous other Washington busi-
ness organizations, were presented
at the final hearing by Frank B.
Cliffe, controller of the General
Electric Co.
Critizing some features of the re-
vised McGehee bill, which was be-
fore the subcommittee, along with
different plan fostered by Repre-
sentative Eberharter of Pennsyl-
vania, Mr.. Cliffe declared that
without an employer exporting rat
Ing system-under which employers
showing stability of employment
could earn reduced pay roll tax
yates-an incentive to maintain
steady pay rolls would be lacking.
Neither the McGehee bill nor the
Eberharter bill provides for the
employer rating system, but was
embodied In a proposed measure
which has not been introduced in
the House-offered at Wednesdays
hearing by Lawrence E. Williams,
president Of the Board of Trade.
Bates Argues for Cutting Tax.
At the end of Mr.. Cliffe's dis
cussion of the need for employer
experience rating, Representative
Bates of Massachusetts, called at
tention to reports from the District
Building that collections on the Dis
trict's new corporation income tax
had fallen considerably below the
estimated revenue of $2,200,000. He
asked Mr.. Williams if business re-
turns in Washington had been fall
ing off.
Mr.. Williams replied that he was
not advised as to the status of the
corporation tax revenues, but that
business here had been declining
this year.
Then" said Mr.. Bates, "this
seems to be another good reason
why the current pay roll taxes un-
der the compensation insurance law
should be reduced to take some Of
the load of business, in view OF the
large unemployment reserve fund
that has been accrued"
YES" replied Mr.. Williams, there
Is no reason to continue to build up
this reserve fund"
Sliding Scale Provided.
The pending McGehee bill, while
providing for reduction of the basic
employer tax rate from per cent
to 81 per cent, which is the new
Federal plan, also calls for use OF
q sliding scale formula for fiat rate
reductions, measured against the
amount of the benefit reserve fund.
It was stated to the committee that
under this plan, if adopted, the rate
for all employers would drop to one
half of l per cent beginning July l,
because of the size of the reserve
fund.
Questions from subcommittee
members brought predictions that
such a rate would apply for several
years, and perhaps longer, before
the reserve was brought down to a
level which would call for possible
increases.
While agreeing that not all en-
ployers can accomplish real stability
in employment, due to seasonal ma
lures of their businesses, Mr.. Cliffe
argued that even in seasonal in
dustries much improvement can and
is being made where preferential
pay roll tax rates are permitted.
d. C. Law as precedent"
In passing legislation for the Dis
krict, Mr.. Cliffe argued, Congress
should consider the effect of "prec-
edent" that may be established for
the States to follow in the measure
of Iberalized benefit scales. What
may be suitable levels for the Dis
trict, because of its general stability
OF employment, he explained, might
be definitely harmful" If followed
by States which suffer from un-
stable employment conditions.
I'm other words" said Mr.. Eber-
harter, what you are saying is that
In fixing the scale of benefits in the
District we should consider what
the States could carry; yet in fixing
the pay roll tax rates in the District
we should not consider what are
the rates in the States?"
Mr.. Cliffe insisted there was MOTH
ing illogical or inconsistent in the
view, holding that the tax formula
should be set up to yield what reve-
nue. each jurisdiction needs to meet
Its jobless benefit costs.
Eberharter Bill Favored.
AS the hearing ended, Sidney r.
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