Evening star., 1941-06-23

To-Day, t0e reserve 1uIlUS IOI llle
country as a whole amount TO ap-
proximately $4,000 100000, and, with
employment and pay rolls rising
steadily, it is estimated that total
reserves will have increased to about
50 $50, 100000 by July l.
The Districts experience in this
respect is typical of many jurlsdlc-
tions. Since 1886. local employers
have paid more than S26,000,0OO IN
pay roll taxes for unemployment
compensation. Benefit payments, on
the other hand, have amounted to
s5,s00,000
$4,000 900 in Reserve.
In other words, about 81 per cent
of collections has been paid out IN
benefits, and the remaining 79 per
cent has gone into a reserve fund
which, with accumulated interest.
now amounts to approximately
s22 100000
This reserve fund, which cannot
be tapped for anything but beneht
payments. is adequate for payment
of benefits for or 10 years. at the
present rate of disbursements Tor
benefits, without collecting a single
additional dollar in taxes, according
to District officials.
Despite a reduction in the local
tax rate last year from 8 to 2.7 per
cent ito bring the District tax down
to the level of the States. plus a
modification of benefit provisions
that placed the District among the
most liberal States in this respect,
a total of s5.753 853 was collected.
while s2117.241 was disbursed IN
benefit checks to the temporarily
UNEMPLOYED. Thus, more than
So 900 900 was added to the huge re-
serve fund in 1910.
Benefit payments for the country
as a whole during the first three
months of 1941 showed sizeable de-
creases. while in the District they
Jumped to new, high levels. But
even with these sharp increases IN
benefit payments, the District mas
continued to collect far more than
it has been called upon to disburse
in benefit payments.
Relief Due Employers.
During the first five months OF
this year, the Unemployment Com
pensation Board collected S2,9O4,-
900. while paying out 81 ,165 900. And
it is pointed out that first-quarter
payments are among the highest be-
cause of seasonal curtailment of en-
pIovment in the construction and
trade industries and the initiation
of a new benefit year in January.
Pointing to the reserve fund now
credited to the local unemployment
compensation system in the Treas
ury and the rate at which the fund
is being required to meet all certified
benefit claims, John A. Marshall,
director of the District Unemploy-
ment Compensation Board, says II
has become evident beyond the
point of controversy that EMPLOYERS
in the District are entitled to fur
ther relief from the excessive" tax
now imposed.
He is supported on this point by
the American Association OF Social
Security, which advocates lowering
the present Federal tax. Pointing
out that State reserves are increaS-
ing at the rate of half a billion
dollars yearly, the association SAID
recently:
Since these accumulated funds
are derived entirely from the re-
gressive taxes on pay rolls, and IN
some States also on wages, which
otherwise would be spent mainly
on consumers goods, they are def
nitely deflationary and initiate
against the very objectives OF un-
employment insurance-to provide
for unemployed individuals and to
help reduce unemployment by in
creasing the purchasing power OF
the lower-income groups.
Defies Common Sense"
although small reserves are ad-
visable at all times and larger
reserves may be justified in pros
porous times, the withdrawal of
about half a billion dollars annually
from purchasing power during years
when the number of our unem-
ployed is staggering and mass con-
sumption inadequate for the ma
tional economy constitutes a de-
fiance not only of the purposes of
these laws but of ordinary common
sense"
The association says the huge
sums now held In reserve "are not