Evening star., 1941-06-23

Immediately needed for benefit pur-
poses and are more than ample to
meet any foreseeable emergency in
the near future" 1t suggests that
a lower tax rate would prove OF
great help not only to many
marginal employers who cannot
bear the present tax and are being
driven out of business, but to
thousands of workers who are
thrown out of jobs by chronological
displacements induced by the heavy
taxes. which are increasing the
number of our unemployed"
The Social Security Board, on the
other hand. has repeatedly ex-
pressed its opposition TO any cut in
the Federal payroll tax, and has
urged liberalization of benefit pay
ments. In its annual report for
1910. the board said:
Further knowledge Of current in
dustrial conditions and probable
economic trends is needed to provide
forecasts of future income and ex-
penditures. It is obviously neces-
sary for States and the Social
Security Board to observe these
relationships over period of years
to determine the amounts needed to
finance benefits. 1t is the opinion
of the board that if funds should be
found to exceed the amounts re-
uuired to finance a States present
benefit provisions during a reason
aole period. the first step should be
10 use the excess to make benefits
more adequate in amount and dura-
ton"
Purpose "Nullifed."
Chairman Arthur J. Altmeyer OF
the Social Security Board points
out:
The benefit formulas incor-
porated in the early State laws do
not represent what were considered
to be adequate unemployment
compensation benefits, but repre-
sent benefits which it was estimated
3 per cent tax could carry. In
an effort to assure Solvency Of
State funds much too large a safety
factor was used in the benefit fer
mulas. If this early conservatism
were to result in the freezing of
these benefit formulas and the ac-
cumulated surplus funds were to
be used as an argument for tax re-
duction, rather than as JuStlfica-
ton for liberalization of benefit pay
ments the very purpose of the un-
employment compensation would be
nullified."
Other opponents of payroll tax
reduction contend that reduction
of the contribution rates would tend
to freeze benefits at their present
level, and in some States would
even necessitate reduction in the
present benefits.
District officials point out, how
ever, that the modified benefit pro-
visions which became effective last
July l give the District one of the
Nations most liberal systems. Only
four other Jurisdictions, for exam
pie, have a maximum weekly hem
eft rate of $18. Provisions for
duration of benefits and allow
anceS for dependents also are
among the most liberal.
Fund Lies Idle.
In the opinion of local officials,
the extent to which the present tax
is unnecessary is plainly shown in
the s22,000,000 reserve fund and
the rate at which the fund is be-
ing required to meet benefit claims.
Director Marshall says he believes
1t is unhealthy" to take millions
OF dollars out of circulation every
year and place them in a reserve
fund simply to lie idle and draw
interest.
This interest alone, he points out,
would be more than sufficient to
defray the annual administrative
expenses of the Unemployment
Compensation Fund. But the
money merely goes back into the
fund to draw more interest, and
the administrative costs are met
with grants from the Social Secur-
lty Board.
In his annual report for 1910,
Mr.. Marshall said the board was of.
the opinion that, because of tas
comparatively small unemployment
hazard in the District, retention of
the present ratio of contributions
will merely add to the present sur
plus.