…finally, it is paternalistic and incompatible with our fundamental conception of democracy.
…it still is true that the young people of today in this country look to the people who have succeeded in spite of every handicap such as that, as their inspiration for doing things. I think we do not want to kill off that spirit of individualism. I use the term ‘individualism’; I know it is sneered at a lot, but I know if is still a respectable term and I think we ought to cultivate it instead of sneering at it.
…this is no time to put additional burdens on employers and employees and State administrations. Recent legislation has created plenty of burdens without adding the one. It is an extremely dangerous time to discuss raising labor costs in the sense of labor costs per unit.
The proposed pay-roll tax is not only a sales tax, but, in addition, is a production tax, a processing tax, and a distribution tax. It has all the vices and none of the virtues of a sales tax. It is selective as to the classes of business against which it is to be assessed, and hence, is discriminatory. It is cumulative; it applies over and over again on every operation from the production of raw materials to and including the final sale of a product to the ultimate consumer…The pay-roll tax is a hidden tax and each successive purchaser of a commodity pays the tax if it can be passed on under the circumstances of the particular transaction.
…in regard to the ultimate consequence of this legislation, that is leaving aside the effect that might be produced this year or next year, on pay rolls, we wish to point out the added incentive it creates for the more rapid introduction of labor-saving machinery for the definite purpose of reducing the total taxable pay roll and thus add to the unemployment....Further there is always a maximum labor cost that any industry can meet and there will be a definite increased tendency for employers to consider this tax as a part of the wages of their employees and keep the direct wage paid as low as possible to reduce such wage by the size of the tax itself; I am indicating that only as a natural business tendency.
The fact is that one of the reasons why our business leaders, large and small and in almost every kind of business, are fearful of the future is because of the well-defined campaign of a very few people to foist upon this country a complete scheme of compulsory social insurance. The little group—and it is astonishingly small in numbers, though tremendously vocal—is largely of foreign origin, a substantial part of the advocates of this system coming from Germany and from countries lying further east.
In all probability, however, compulsory unemployment insurance cannot be had without an amendment to the Constitution, probably both state and federal, as such a measure might be attacked on the grounds that it is confiscation of property without due process of law.
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