Evening star., 1944-11-27
A|tmeyer Opposes
Move for FREEZING
Social Security Taxes
BY I. A. OLEARY.

|
taxes for social security are post
poned the higher future levies will
have to be ''if the insurance system
continues to be financed wholly by
payroll taxes" Arthur ]. Altmeyer,
chairman of the Social Security
Board, told the House Ways and
Means Committee today.
He appeared as the first witness
against the move in Congress to
prevent for the fourth consecutive
year the automatic increase, slated
to take effect January l, from / to
2 per cent each on employer and
employe for old-age insurance.
Mr.. Altmeyer admitted the argu-
ment Of advocates of postponement,
that the present l per cent rate is
producing as much as the 2 per
cent rate was estimated to raise
in 1899, but contended this is because
more people have become insured
and large credits, on which benefits
are based, have been accumulated
by the workers insured under this
system.
Fund Eight Times OutgO.
Advocates of poStponement argue
that the present reserve fund is
eight times the highest estimated
outgo during the next five years,
whereas three times that outgo is
considered adequate.
Under cross-examination Mr.. Alt
meyer agreed that for the next 20
years the tax collections will exceed
the expenditures for old-aee in
surance.
This prompted Representative
Knutson, Republican, of Minnesota
to assert that you want us to take
money out of circulation that won't
be needed for 20 years"
Mr. Altmeyer disagreed with this
reasoning, however, contending the
Government has made immediate
promises" to the people covered by
the system and that when less than
the cost of those promises is col
lected, it means that eventually the
Government will have to find that
money elsewhere.
Six Billions Collected.
Mr.. Knutson then brought out
that since the system began in 1885
the Government has collected So
OO0, 900 900 in old-age insurance
taxes, while benefit payments are
running about 5000 600, 900 a year.
Mr.. Altmeyeris estimates that re-
ceipts would exceed expenditures
! in
crease in the tax from l to 2 per
cent each on employer and employe.
Later questioning developed that if
the rates are frozen at the present
level receipts would exceed expendi-
lures for only 9 or 10 years.
Mr.. Altmeyer testified that while
less than 100000 persons now are
drawing old-age benefits, the num-
ber probably would have been dou-
bled had the manpower emergency
not developed. He said 100000 per-
sons who were drawing benefits have
gone back to work, and that $50, 900
who have reached IS are remaining
at work.
This prompted Representative
Cooper, Democrat, of Tennessee, to
observe that when the war ends the
tendency will be to encourage re-
tirement of persons 65 or over.
Time to Get Contributions.
Mr. Altmeyer also argued that the
time to obtain necessary contribu-
tions is when people are better able
to pay for the future benefits.
"If we should let a situation de-
velop whereby it eventually becomes
necessary to charge future bene-
ficiaries rates in excess of the ac-
tuarial cost of the protection af-
forded them, we would be guilty oi
gross inequity and gross financia
mismanagement, bound to imperi
our social insurance SYSTEM" Mr.
Altmeyer said. recalling his testi-
mony of a year ago when the same
question came up.