Evening star., 1940-01-12
Encouraging Stort


ment Compensation Board to rec
ommend to Congress that the local
unemployment insurance statute be
materially modified should be re-
ceived with qualification here, both
by the employer taxpayers and by
the employe beneficiaries of the sys-
TEN. District authorities should lose
no time in transmitting the recon-
mendations to Capitol Hill and re-
questing favorable consideration.
Beyond any reasonable disputlng
the proposed changes do no more
than make start toward the correc-
ton of certain defects which have
been demonstrated in the local law
in the early years of its operation.
They would not in any degree weaken
the compensation system here, nor
should they be considered the ulti-
mate in its improvement.
Either by oversight or by mis-
directed intent, the taxing provision
of the District law, one of the first
of the local statutes to be enacted
in the wake of the omnibus Federal
law. imposed upon the local en-
ployer taxpayers rate which in
operation totals 33 per cent rather
than the 3 per cent maximum
now effective in all but one State
in the Union. The District board
now recommends that this rate be
corrected to reduce the maximum to
3 per cent.
At its last regular session the
Congress revised the master law to
make its portion of the unemploy-
ment compensation tax applicable
only to the first $4,000 of earned
wages of each worker covered, a
limitation already operative in the
case of the old-age pension tax
The District board now recommends
that the local law be brought into
conformity with this modification.
But far from concerning itself
solely with justifiable relief for the
taapQySlS, UllE DlSUllCU UOd1u dlSU
recommends that there be a distinct
liberalization of benefits; raising the
normal maximum weekly benefit
from SIS to $40 and permitting pay
ment of benefits over a twenty week
period rather than sixteen weeks, as
at present
This would leave the District with
a higher benefit schedule than any
State, but in actual operation, it is
said, the average benefit here would
barely exceed the national average.
Because of the broader coverage of
the District law and it's inclusion of
persons entitled to minimum bene-
fits, the average of local weekly pay
ments has been SO over the past two
years as compared to $10.85 for the
country at large. 1t is estimated
that the proposed increases here
would not raise the District average
above $12 weekly, and perhaps not
as high as that.
Under the present comparatively
high tax rate applicable here, Dis
trict employers are now paying about
S6,0O0,000 yearly into the compensa-
tion account. At the same time, un-
der the present benefit schedule
disbursements to benefciaries have
appropriated 81 100000 yearly. The
balance stands untouchable for other
purposes, adding to an unnecessarily
large and fast-mounting reserve now
totaling about $16,OOO,0OO.
BY its recommendations the board
would save local employer r-taxpayers
up to Sl,000000 yearly and would
place in the hands of beneficiaries
an added S15O,OO0 yearly. Between
income and disbursements there
would still remain an unnecessarily
large spread which should be re-
duced. The tax is excessive when it
produces more revenue than is nee
essary. The reduction in the tax
now recommended is only a begin
ming in the direction of reducing it
to the point where it covers the
essentials.