Evening star., 1942-06-19
Ry j. A, FOX.


Thousands of "little business"
establishments would be helped by
the proposed revision of the District
unemployment compensation law
under which the payroll tax, which
finances the benefits for jobless
workmen. would be cut from 2.7 per
cent to 0.5 per cent.
Little business" is subject to the
unemployment compensation law
here to a greater extent than any
where else in the country-oarrng
the State OF Washington-because
the local statute covers concerns II
they have but one workman. Else
where the rule is four to eight. nor
does the tax take any account OF
the financial condition of the tax
payer.
The plight of little business" was
sketched by witnesses before a DIS
trict judiciary subcommittee OF the
Ho,,se last fall when hearings were
held on the amendments by Rep
resentatiye McGehee, Democrat, OF
Mississippi, which would increase
tn. laws benefits to labor as well
as cut the tax. In some instances,
business spokesmen said. the savings
the McGehee bill made possible
would spell the difference between
a successful and unsuccessful enter
prise.
Little Relief in 5000 Limit.
The issue was raised in connec-
tion with the discussion OF a cnange
In the basic law in 1910, wnen tne
coverare of the tax was limited 10
the first $1,000 earned by an IN
diyidual instead Of applying TO totai
wages, This revision was made ma
t,onallv 80 the unemployment TAX
basis would conform to that 1or Old
ace insurance under the Social Sc
eurity Act.
I'VE get very little relief from that
IN the case of the average eH-
nlover," said Rufus S. Lusk, presl,
dent of the washington Taxpayers
Association. There are about Il, ,ooo
AZ them in Washington, and tne
vast ma iority employ only two. three
or four people. These empowers
have none of the So, 900 or -more-per-
wear employees. and therefore tney
get no relief on that score IN Inc
q mount of tax collected.
Using his own case as an exampie'
Mr. Iusk said that the saving on
his small staff would amount TO 800
"That could be multiplied by
thousands of cases" he added.
The same phase was developed
further by Lawrence E. Williams.
a spokesman for the Board OF
Trade, who emphasized that the
huge reserve-now over $2S'ooo,UW
built up from the payroll tax, and
far in excess Of any concelvapie
demands, actually is money taken
out of productive enterprise here.
From All Employers.
more than that" he continued,
cit has been collected from all en-
ployers, regardless OF whether those
EMPLOYERS are operating at a pront:
Support for the changes which
now are being pressed for early
action by Representative McGenes
came also from other commercial
interests: spokesmen for American
Federation of Labor unions ano D.
Russell Young, president OF tne
Board of District Commissioners:
The uneconomic proportions the
unemployment fund is attaining
under the present tax rate Is the
basic reason for the changes that
are being advocated. Mr.. McGehee
estimates that even with further
liberalization of unemployment al
lowances. this reserve, held In trust
bv the Government and drawing
2la per cent interest, would not
drop under $10,0 900 900 over the next
10 years at the 0.5 per cent tax rate.
Mr.. McGhee's estimate makes due
allowance for possible contingencies
that would affect the reserve ad-
versely, such, for instance, as large
scale unemployment cutting deeply
into the fund. At the same time,
however, those who favor the
amendments point out that generally
speaking, employment is on sucn
an even keel here because OF the
stable Government payroll tnat
large scale idleness hardly is with
In the range of possibilities. This
might not be true In heavily In
dustrialized State.
Bill Slightly Modified.
The whole subject of unemploy-
ment law changes was SO thoroughly
cone into last fall that Mr.. McGehee
is not planning to hold hearings on
the current bill, which is a slightly
modified version of that previously
before the committee. Some ideas
advanced at that time have been
incorporated in the projected meas
ure.
The principal gain for labor is the
provision to pay Unemployment
compensation for 20 weeks, with the
maximum rate at $40 weekly. Now
that rate is $18 for 10 weeks.
The new measure proposes also
that the Unemployment Compen-
sation Board study the subject OF
experience ratings as a tax basis,
and report to Congress not later
than January /, 1914. Business
circles have inclined favorably to
the experience rating plan, under
which the stability of the individual
employers operation determines hts
tax rate. This plan will go into
effect here on July /, 1943, unless
the law is changed in the meantime.
1t would not permit the tax rate
to dip below III per cent ana II
might 60 as high as 4.
Marshall Backs Proposal.
John A. Marshall, executive Of
ficer of the Unemployment Com
pensation Board, a strong supporter
Of the McGehee bill, told the House
hearing that an experience rating
plan could do nothing toward ao-
sorbing the reserve.
"Over a period of l0-year spread
under the experience rating plan,
4. ~zaA a,,.,, -x~x,1I Ard that the