Evening star., 1941-10-31
Action Due Soon
On Bill 10 Cut
Pay Roll Tax
Full Committee to Get
Plan After Social
Security Testimony
By JOHN III. CASSADY, Jr.

The Judiciary Subcommittee of
the House District Committee will
take action next week on a bill to
provide a substantial reduction in
the Districts unemployment COM
pensation tax rate, Chairman Nc
Gehee announced today on COM
pletion of public hearings on the
measure.
Another hearing may be held be-
fore the subcommittee reports the
bill to the full District Committee,
to permit representatives of the
Social Security Board to testify, Mr..
McGehee said. The Social Security
Board had expected to have wit
ness at the final hearing today, but
was unable to do so.
Chairman McGehee would not
forecast the subcommittee action.
Opposition may come from at least
one member, Representative Sauth-
off. Progressive, of Wisconsin, who
is a strong advocate of the so-called
experience-rating system of unem-
ployment insurance. The pending
bill provides a fiat reduction in the
tax instead of experience rating.
Benefits Liberalization Asked.
The final hearing was marked by
expressions of support and opposl-
Uion to the taX-reducing bill and
demands for liberalization of beneht
provisions in the present act.
The chief support for the proposed
tax reduction came from the Board
of Trade, the Merchants and Manu-
facturers' Association and the Cen
trail Labor Union.
Outright opposition to any reduc-
ton in the tax rate was voiced by
Sidney r. Katz. secretary OF the
Maryland District of Columbia In
dustrial Union Council.
Mr.. Katz agreed that the reserve
fund now is too large, but said he
believed a large surplus would be
needed to take care of unemploy-
ment compensation claims after the
emergency ends.
Would Liberalize Benefits.
Instead of reducing the tax, he
said. benefit provisions should be
liberalized. Among the changes he
recommended were extension of the
duration of benefits from the pres
ent 10 weeks and increases in the
minimum payments and in provl-
sions for dependents.
Mr. KatZ said the subcommittee
al-o should consider extension OF
unemployment compensation cov-
erage to include domestics and as
many categories of Federal workers
"a7 would be rea asonably possible
Ettar Mr.. Katz testified Commits
Sicner John Russell Young. chair
.non Of the District Unemployment
c, mpenSation Board, told the COM
M. .e the board is heartily in favor
of increasing the duration of bene-
fits to 20 weeks and raising the
maximum weekly benefit to $40, as
VII as the proposed tax reduction.
Fred Walker, representing the
Central Labor Union, also supported
the bill and urged further liberali-
zation of benefits.
Lawrence E. Williams, chairman
of the trade groups Committee on
Employment and Security, told the
subcommittee today there is general
agreement that steps should be
taken at once to end this unsound
and inequitable process of with
drawing and freezing productive
funds from District enterprises"
The witness said he was referring
to the fact that the District now
has accumulated almost $24,000,000
in unemployment compensation
taxes paid by local employers. This
sum is sufficient, he said, to pay all
benefits under the law for more than
10 years without collecting any more
taxes.
Sound Position Seen.
Mr.. Williams cited figures to show
that through June of this year,
only 221a per cent of the tax COL
lections had been expended for
benefits Since benefits first be-
came payable in January, 1898,
slightly less than 30 per cent of
collections went out in benefits.
Declaring that the only point in
dispute is how the reduction shall
be made. Mr.. Williams told the sub
committee the Board of Trade still
Is of the opinion that the so-called
experience rating system is the most
equitable and democratic way of
financing unemployment compensa-
ton
He added. however that unsuc-
eessful efforts were made last ses-
sion to obtain such a system and
that the board believes the rapid
growth of other taxes make it es-
sential for us to secure relief from
this and other taxes" For that rea-
son, he said, the board strongly
urged enactment of the pending
bill, which provides fiat reduc-
ton in the tax rate from 81 per
cent to one-half of l per cent.
Sundlin Adds Support.
Support for the bill was voiced
also by Arthur j. Sundlin, president
of the Merchants and Manufacture
ers' Association.
He pointed out Jnat employers
here are paying more than three
times as much as needed to pay
compensation claims.
Mr.. Sundlin said his organiza-
tion also would prefer system of
experience rating If the District
could get the same immediate re-
lief as would be provided by the
proposed f1at-rate reduction. Un-
der the experience rating plan, in
dividual employers would be re-
ouired to pay into the tax fund an
amount equal to payments from the
fund to their former employees.