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October 3, ivU Chairman Secies Krost Chengee in Sooi&l Security Coverage received the following information through Kr. Currie f s office for your confidential use. The Social Security Board i s making th© following roeoxanondations. I t i s not clear ishether those recomends-tions have been accepted by the President and by th© Treasury. The Board i s recosa:endir.g extension of coverage under th© Old Agt Insurance System to agricultural laborers, domestic servants, employees of non-profit organizations, fttTft operators and other solf-enployed persons raid government employees. The Board i s recommending extension of coverage under unemployment insurance to ©mployees of establishments hairing less than eight workers not covered under the present systeri* She Board estimates that the extension in coverage and cm increase in the tax rate for old-age insurance from 2 to h per cent would raise th© yield of t h i s t«JE fron th® present annual rate of about $000 million to about |2 b i l l i o n . The Board proposes to raise the present 3 per cent tax. for employment insurance to I; per cent and to nationalize the system which Is now administered by the State governments with different scales of employment benefits prevailing in each Btat@. They estimate that these ehanges would raise th© yield of this tax from i t s present level of about $900 million to $1,600 million. Th® change-over to a fully federalized busie -will require some time and i t will not be possible to make this change fully effective before 19^3* 3&e Board elso proposes to set up a system of disability and hospital!2ation benefits and to levy a special 2 per cent t&x for this purpose yielding about $800 million a year. The combined effect of these proposals would be an increase ifom the collections of 01.7OO million in I9I42 that would be made if the system were left unchanged to %3$10Q million. In 19^3 collections would increase to ll^l+GO million* The old»age tcaee ar© levied one-half ;Xpon employers and onehalf upon employees. H ' i© unenployment tsates ar© levied wholly upon employers* I t i s generally b@li©v©d that except in special situations th© employers' pert of the tax i® passed on to th© consuming public i s th© form of higher prices or back to ©mployees in the form of lower wages than would be paid in the abeenc© of th© tax.
@FedFRASER