SOCIAL EXPERIMENT

Northern Advocate, 12 August 1935, Page 5

SOCIAL EXPERIMENT

U.S. SECURITY BILL GREATEST TAX BURDEN HEAVY LEVIES PLANNED. WILL IT BECOME LAW? t tUnited Press Association—By Electric Telegraph. — Copyright .] (Received 11 a.m.) WASHINGTON. August 10. Congress has granted the Administration authority to embark on the most expensive social experiment in the history of the .United States. Intended to safeguard millions of people in their old age and in times of stress, the Social Security Bill received final approval in the Senate, without a recorded vote. This ended seven months of turbulent debate and “back stage” negotiations. The Bill imposes the greatest tax burden ever approved by Congress. It provides for old age and unemployment benefits for an estimated total of 25,000,000 workers and appropriates millions of dollars for aiding handicapped mothers and children. Many members of the Congress predict that part, or all, of the Bill will be invalidated by the Supreme Court. Tax On Salaries. The section most frequently challenged on constitutional grounds authorises the creation of a nationwide old age pension fund by levying a 3 per cent tax on employers and employees, against salaries of workers up to 3,000 dollars a year. This fund, it is estimated, by 1980 will reach 50 billion dollars. It is expected to provide pensions for retired workers at the age of 65 and over,;, up to 85 dollars a month. Supplementing this, the Federal Government would offer grants of 15 dollars a month to be matched by the State for all the needy and aged not taken care of under the contributory system;, also similar grants for the blind regardless of age. Payroll Levy. The Government also would levy a 3 per cent payroll tax against employers of eight or more persons, out of which deductions could be made up to 90 per cent for payments to state unemployment insurance schemes. These two payroll taxes, it is estimated, will yield 3 billion dollars annually by 1950. The Finance Committee of the Senate has completed its revision of President Roosevelt’s tax programme, broadening the base of the measure as it left the House of Representatives to include increased levies on citizens with small means. On the proposed schedule, relief- workers earning 94 dollars a month will be liable to a tax of 13 dollars. The measure is so vastly different from that recommended by President Roosevelt that it is generally predicted that it will never become law.