The people's voice. [volume] (Helena, Mont.) 1939-1969, 1944-07-14
Financing Social Security

tney may i've.
, vi.
Financing Social Security
Our present Social Security system
is financed by contributions paid b,
workers and their employers. The
bill does not change this method O
financing. 1t increases the contribu
lions payable by workers and theil
employers and, at the same time, sub
stantially extends benefits. 1t pro
vides for eventual government con
tributions to meet possible future de
ficits.
We believe that Social Security
should be financed out of general rev
enues rather than through payroll OF
wage taxes. A wage tax is a flat
gross income tax, without exemptions
and is payable irrespective of wheth
er the worker is single or has de.
pendents, and without regard to abil-
ity to pay. The payroll tax adds an
increment to the cost of production,
which is substantially passed on to
consumer. To the extent that the
benefits received by workers of the
nation in any year are less than the
wage taxes paid by them, the national
purchasing power has been reduced.
Since the objective of social insur-
ance is the maintenance of living
standards, wage and payroll taxation
defeat major objective of social in
surance.
The insistence upon the contribu-
tory principle involves fundamental
confusion between the right to social
security benefits and the methods by
which they are to be financed. 1t is
claerly in the national interest that
the people Of our country be insured
against want and insecurity. How
the money is to be raised is a ques-
ton to be determined upon con-
sideration of the sources of revenue
which can best be utilized. There is
nothing unsound and negotiable in
taxing those who are best able to
pay for others who need the benefits.
Education serves as a precedent of
benefits as of right in direct relation
to need, though financed out of gen.
eral revenues. A person with many
children gets full education for ALL
while a person with one child gets it
for one; and each of them, and all
tax funds, which finance the program,
without regard to the amount of ben
eft received.
The National Lawyers Guild posi-
ton is, in sum, that the social secur-
ity needs of the nation should be IL
nanced from general taxation accord
ing to ability to pay. This would in
volve taxing every income recipient
on progressive basis and would not
limit the burden to the workers alone.
1t would involve taxing workers |
whose wages are in excess of mini
mum living requirements and it would
involve taxing large income recipients
in proportion to their ability to pay
We believe that it is unsound that |
people who do not work and who re-
ceive large incomes should be re-
Iieved of any tax obligation to sup
port, through general revenues, sys- |
tenn ministering to the social security |
needs of the entire people.
The Unsoundness of Substantially In
creasing Wage and Payroll Taxation
At This Time.
We believe that at this time, par
,icularly, wage and payroll taxes
should not be substantially increased.
Proposals for increasing payroll and
wage taxes have been justified on
he ground (1) that this is necessary
rs deflationary device in the fight
against initiation and (2) that such
axes can best be borne during Pc
'iod of high employment and high
wages. There is little inflationary
LANCER from low income groups, for
t is not these groups which have the
die billions of dollars of income
which constitute the inflationary dan
,er. But even if the contention were
sound, initiation is a temporary phe-
lomenon and it would be inappropri-
tie to formulate long-range, perma-
lent, social security financing pro-
ram on that basis.
Cutbacks in war production begin
ling late in 1943 foreshadow the ia
,ering off of war production and the
of a transition from
var to civilian production before the
var is over. Workers are now pay
ng Withholding tax of POO; they
ind that the rise in the cost of living
las decreased the purchasing power
# their wages; they will find that
ubstantial increases in wage taxes
will further reduce their purchasing
,ower and living standards.
We believe that support for the
ill can best be rallied by financing
which will raise through
eneral taxation the necessary rev
nues required by the expanded serv-
ces and benefits proposed.
Government Contributions
In Part One of this Report, we have
commended that the bin be
mended to provide for immediate
overnment contribution. 1t must not
Q forgotten that, side by side with
s present system of social insur-
nee, the government maintains a
ystem of public assistance, provid-
lg some relief TO some of the aged
nd destitute, who are not covered by
ne social insurance system. All the
loney paid out for public assistance