KF27 .W3 1934 Copy 3 COMMITTEE ON WAYS AND MEANS HOUSE OF REPRESENTATIVES ROBERT L. DOUGHTON, North Carolina, Chairman SAMUEL B. HILL, Washington JOHN W. McCORMACK, Massachusetts ASHTON C. SHALLENBERGER, Nebraska JOHN W. BOEHNE, JR., Indiana ALLEN T. TREADWAY, Massachusetts HAROLD KNUTSON, Minnesota THOMAS C. COCHRAN, Pennsylvania CONTENTS Page Statements of: Allen, Walter D., Brookline, Mass., representing the National Edito- 399 Altmeyer, Arthur J., Madison, Wis., representing the Industrial 166 Barta, A. K., Washington, D.C., representing the American Transit 388 359, 426 Denby, Charles, Jr., Philadelphia, Pa., representing the Committee on Donnelly, James L., Chicago, Ill., representing the Illinois Manufac- Douglas, Paul H., Washington, D.C., representing the Consumers 276 402 47 Draper, Ernest G., New York, N.Y., representing Hills Bros. Co.. 156, 283 Eastman, Miss Elizabeth, Washington, D.C., representing the Na- Epstein, Abraham, New York, N.Y., representing the American 34 Folsom, M. B., representing the Eastman Kodak Co- 65 Gadsden, P. H., representing the chamber of commerce, Philadephia, 248 Gall, John C., Washington, D.C., representing the National Associa- 313 Hopkins, Hon. Harry L., Federal Emergency Relief Administrator__ Hutzler, Albert D., representing Hutzler Bros. Department Store, Jackson, Henry E., representing the Social Engineering Institute, Kittle, Mrs. William, Washington, D.C., representing the National 159 Leeds, M. E., representing Leeds & Northrup Co., Philadelphia, Pa 145 Statements of-Continued. Page Lucas, George C., New York, N.Y., representing the National Pub- 395 Magee, Miss Elizabeth S., Cleveland, Ohio, representing the Con- 223 Mead, Bennet, Baltimore, Md., representing the Peoples Unemploy- 210 Meeker, Royal, New Haven, Conn., representing the Index Number 194 Meriam, Prof. R. S., representing the Harvard Business School, Cam- 228 Rubinow, Dr. I. M., Cincinnati, Ohio, representing the B'nai B'rith, 187 271 Silver, Rabbi A. H., Cleveland, Ohio, representing the Unemploy- 184 Slichter, Sumner H., representing the Harvard Business School, 173 Smith, Hon. Edwin S., Boston, Mass., representing the Department 219 117 Swope, Gerard, representing the General Electric Co., New York, Todd, Dr. Edwin S., representing Miami University, Oxford, Ohio.. Wagner, Hon. Robert F., United States Senator from the State of West, Walter, representing the American Association of Social Workers, 130 East Twenty-second Street, New York, N.Y____ Whitmore, C. W., representing the Peoples Unemployment League of Draper, Ernest G., representing Hills Bros. Co., New York, N.Y. 156 156 Brief of: Devine, Edward T., representing the Nassau County Civil Works 424 UNEMPLOYMENT INSURANCE WEDNESDAY, MARCH 21, 1934 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE OF THE COMMITTEE ON WAYS AND MEANS, Washington, D.C. The subcommittee of the Committee on Ways and Means met at 10 a.m., Hon. David J. Lewis (chairman) presiding. (The bill under consideration was H.R. 7659, which is as follows:) [H.R. 7659, 73d Cong., 2d sess.] A BILL To raise revenue by levying an excise tax upon employers, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, DEFINITIONS SECTION 1. When used in this Act the term "Employer" shall mean any person, partnership, association, corporation, or the legal representative, trustee in bankruptcy, receiver, or trustee thereof, or the legal representative of a deceased person, who or whose agent or predecessor in interest has, within each of twenty or more calendar weeks in the taxable year, employed at least ten persons in employment subject to this Act, except that the term "employer" shall not include the Federal Government, the governments of the several States, municipal corporations, or other governmental instrumentalities. In determining whether an employer employs enough persons to be an employer subject hereto, and in determining for what tax he is liable hereunder, he shall, whenever he contracts with any subcontractor for any work which is part of his usual trade, occupation, profession, or business, be deemed to employ all persons employed by such subcontractor on such work, and he alone shall be liable for the tax measured by wages paid to such persons for such work; except as any such subcontractor who would, in the absence of the foregoing provision, be liable to pay said tax, accepts exclusive liability for said tax under an agreement with such employer made pursuant to regulations promulgated by the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury. "Employment” shall mean any employment in which all or the greater part of the person's work is, or was, performed within the continental United States under any contract of hire, oral or written, express or implied, whether such person was hired and paid directly by the employer or through any other person employed by the employer, provided the employer had actual or constructive knowledge of such contract; except that for the purposes of this Act it shall not include (1) employment as an agricultural laborer; (2) employment in the domestic service of any family or person at his home; (3) employment as a teacher in any school, college, or university for the regular annual term for which such school, college, or university is in session; (4) employment as a physician, surgeon, interne, or nurse in a hospital, snatorium, or other similar private-endowed institution not operated for profit; (5) employment of a physically handicapped person by an institution financed largely by charitable donations and organized not for profit but primarily for the relief and rehabilitation of such handicapped persons; (6) employment of the father, mother, spouse, or minor child of the employer; (7) employment in the service of a common carrier subject to the provisions of the Emergency Railroad Transportation Act of 1933 (48 Stat. 211); (8) any employment for which unemployment compensation shall have been provided directly by Act of Congress. "Pay roll" shall mean the total amount of all wages paid by the employer during the taxable year to persons employed by him in employment subject to this Act; except that pay roll shall not include the wages paid to a person employed by the employer within such year on a minimum fixed salary basis of $250 or more for each month in which the person was thus employed. "Wages" shall mean every form of remuneration for employment received by a person from his employer, whether paid directly or indirectly by the employer, including salaries, commissions, bonuses, and the reasonable money value of board, rent, housing, lodging, payments in kind, and similar advantages. "State law" shall mean a statute enacted by any one of the several States, providing for systematic compensation and the creation of an unemployment fund or funds. "Contributions" shall mean the amount which the employer has paid for the taxable year to any unemployment fund to which he is required to contribute by or pursuant to a State law, but shall not include any amounts deducted from wages or contributed by employees. 66 Unemployment fund" shall mean any unemployment compensation fund or reserve, or unemployment insurance fund or reserve, or guaranteed employment fund or reserve, to which the employer contributes pursuant to a State law, whether or not under such law other employers contribute to the same fund or reserve or to different or separate funds or reserves, and whether or not under such law the State and/or employees contribute to or supplement such fund or reserve: Provided, That such fund or reserve is available solely for the payment of compensation and of any State administrative costs chargeable thereto under the State law. "Compensation" shall mean the cash benefits payable under a compulsory State law to employees for their unemployment; and shall also be deemed to include, as to any guaranteed employment plan complying with a State law, the wages guaranteed and payable to employees for certain workless hours under such plan. 'Employee", as used in this Act, shall mean any employed person who is covered by a State law and/or may become eligible for compensation thereunder. "State agency" shall mean the State labor department or other governmental agency designated or created under a State law to administer such law. "Tax" shall mean the gross tax imposed on the employer for the taxable year under subsection (a) of section 2 of this Act. IMPOSITION OF TAX; ALLOWABLE CREDITS SEC. 2. (a) There shall be levied, assessed, and collected annually from every employer subject to this Act, for the taxable year commencing July 1, 1935, and for each taxable year thereafter, an excise tax measured by an amount equal to 5 per centum of the employer's pay roll as defined in section 1 of this Act: Provided That said tax shall be paid after the close of each taxable year and may be paid in quarterly installments, under suitable regulations promulgated by the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury. (b) Any employer who has paid the contributions required of him under a State law duly certified under section 3 of this Act may credit against the tax thus due the total of the two following amounts: (1) The amount of contributions which he has actually paid during the taxable year under such State law; and (2) The amount by which these paid contributions were less than his largest required contributions under such law in any previous taxable year: Provided, That (a) the amount thus determined shall, before being credited against tax, be reduced by the same percentage by which the employer's pay roll is less than his pay roll in such previous taxable year; (b) the employer's required contribution rate for the taxable year is less than the comparable rate for such previous taxable year, and that such reduction was permitted pursuant to provisions of such State law not inconsistent with subsection (f) of section 3 of this Act; and (c) the additional credit permitted under this subsection shall not be allowed an employer except where the unemployment fund to which such employer contributes under such State law has paid in full throughout the taxable year |