The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1944-01-06
The Wagner
(Confinued From Pa0P One)

all employers plnS bIr deducted from
the pay of workers.
This seems high. But under the
present law workers and employers
will each be paying 3H for old age
pensions and survivors insurance, be
ginning in 1913. and employers pay 3N
more for unemployment Insurance,
plus Il contribution from the pay of
workers to the unemployment insur-
ance fund in some states. So the addi-
tionHl amount is not too high to pro
vide for sickness and injury benefits,
plus medical and hospital care, plus
benefits for permanent disability, plus
better unemployment benefits than any
state now provides.
Grants-In-Aid
Finally, the bill will create Il system
of generous grantS-in-aid from the
Federal Treasury to states which set
up an efficient non-political system for
providing assistance to the needy. The
federal government is to pay from IOW
to 75%S of the amount paid by the
state, depending on the amount by
which the average income of people
income for the whole country. This is
Il novel principle for the distribution
of federal funds, which was first pro-
posed by the National Resources Plan
ming Board. The reason for this novel
principle in the dist ributiOn Of federal
q, inf fnr l,, do IL
for completely by each state would be
unjust for it would mean that the poor
had to support the destitute among the
rich, who naturally are fewer, both in
number and proportion. States where
there were Il large number of share
cropperS, for example, would tend to
have more deStitutiOn, because Il large
part of their population, during their
working life. live so near the poverty
line that they cannot make the neceS-
Sary provision for their old age or any
other interruption of their income such
AS sickness or injury. This heavier
than average load of destitute people
would have to be supported by taxes
levied on people who themselves were
substantially poorer than the average,
when only state and local taxes are
used to finance relief
Federal grantS-in-aid for relief of
the needy is therefore, clearly neceS-
Snry to prevent such relief from being
an especially heavy burden on people
who are nearer to deStitution than tn"
/. -,
tributionS larger in proportion to states
where the average income is less, this
burden is distributed more justly be-
cause more nearly in proportion to
ability To pay
Furthermore. the federal govern
ment'S powers of taxation are more
adaptable To levying taxes in proper
tion to ability to pay than are the tax
systems of the states. Taxes on in
comes, Inheritance, corporation profits
and gains from the sale of securities,
for example. cannot be levied rs eifec-
lively by the states as by the federal
government. A state government which
sought to impose income or corporation
profits taxes ut rates approaching that
of the federal government would sim
ply drive men of wealth to live across
the state boundary, and cause business
concerns to locate their plants only in
states where the state corporate profits
tax was low or non-eNistent. Likewise
wealthy men would be more apt to
make their legal residence in their old
age In states like Florida where there
is no inheritance tax if other states
made their Inheritance tax rates heavy.
All of these instances illustrate the
principle that the tax system of the
federal government Is more effective
and flexible than that of the states,
especially in the matter of levying
taxes In proportion to ability to pay.
That is the reason for the scheme set
up In the Wagner Murray Dingell bill
for federal grantS-in-aid to the states
for relief of the destitute.