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January 1 1 , 1939, REPORT Off ifflS SOB-COMMITTEE OH THE SOCIAL SECUBUY BOARDfS STATTftTOPS RELATIHa TO TAX COLLECTIONS AKD BENEFIT PAIMEtTOS IN OHg CALENDAR YEAR 1940 The e s t i m a t e s are as presented by the S o c i a l S e c u r i t y Board, with the bases and assumptions i n d i c a t e d by them* I - Unemployment Insurance (a) Deposits in Unemployment Trust Fund Title IX tax collections 749,000,000 91,000,000 840,000,000 Based on budget estimates for fiscal year 1940* These estimates are approximately equal to the rate of collections in the latter months of 1938# (b) Benefit payments Administrative expenses 760,000,000 80,000,000 840,000,000 Assumes sufficient liberalization of state laws relating to benefit payments to equalize income and outgo, II - O^d Age Insurance (a) Tax Collections On present eoverag9,2 percent rate, Mdftipnaiaicpereeg* rate (3 quarters) On proposed coverage 560,000,000 165,000,000 715,000,000 40,000,000 755,000,000 Figures for present coverage based on budget estimates for fiscal 1940, These estimates are approximately the same taxable base as prevailed in the last half of 1938, (b) Benefit Payments The outstanding fact with respect to old age benefit payments in 1940 is the tremendous range - from #48 to #515 million - of possible variation that would arise from the adoption of plans that have been under discussion. Until a definite set of provisions is adopted by Congress, estimates are bound to be attended by the greatest uncertainty. It appears, Moreover, impossible to say at the present time which of several sets of provisions is more likely to be adopted. All that can be done now is to set forth the conditions under which the trii^im™ and maximum amounts would be paid. 1* Mirflmom - #48 million* 2» Lump sum payments under the present law* MflTlTmnp - #515 million* In order to reach this total (or anything like it) extensive changes would have to be made in the existing law* 1* Payment of monthly benefits in 1940* 2* Eligibility for benefits would have to be extended to every one over 65 who had worked in a covered occupation and had earned at least #300 a year since January 1, 1937* This would mean including people who had never paid any taxes under the act at all as well as those who had received lump sum benefits and ceased contributing* If the administrative difficulties in checking wage records, etc*, could be satisfactorily solved as many as 1,000,000 persons might become eligible for benefits in 1940* 3# Adoption of an average wages formula for calculating benefits. It is estimated that this would raise the benefit payment for a single beneficiary to at least #30 a month* 4* Adoption of various supplementary benefits for wives over 65, widows, dependent children, etc* 5. Immediate inauguration of disability benefits* An approximate idea of the relative importance of these various proposals, assuming average monthly benefit payments of $30 per annuitant, may be derived from the following table: lt000f000 qualified annuitants Dependent aged wives **** Aged widows • * . * * Young widows and orphans Minimum death benefits • . • • Disability Accrued death claims • . * • #361,000,000 48,000,000 2,000,000 22,000,000 52,000,000 * • • • 25,000,000 5.000.000 #515,000,000
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