Do not forget this: such an excessive tax on payrolls is beyond question a tax on employment. In prosperous times it slows down the advance of wages and holds back re-employment. In bad times it increases unemployment, and unemployment breaks wage scales.
Removing the capital from the hands of the owner and putting it into the hands of the Government is only, in the main, taking it from the live hand and putting it into the dead hand. So the only possible result of extending the scope of confiscation by the dead hand is to limit the amount of productive enterprise and, therefore, the amount that can be paid in wages.
Never in the history of the world has any measure been brought in here so insidiously designed so as to prevent business recovery, to enslave workers, and to prevent any possibility of the employers providing work for the people.
Business and industry are already operating under heavy burdens: and that old –age insurance would cause more unemployment.
We believe that this measure, if adopted, means at best an annuity of doubtful value for the aged of the future and unemployment benefit of doubtful value for the normally temporarily unemployed of the future--at the terrific cost of retarding the reemployment of those who are unemployed today.
…we are going on the theory that it will create jobs. It will not. We shall create jobs only by giving confidence to people who are in a position to hire other people.
Such a law would inevitably operate to hold down the number of employees on the pay roll as well as to prevent and minimize increases in the rate of pay, so that the burden of the tax could be reduced to the minimum. These bills, in our opinion, are contrary to the spirit of the Constitution of the United States and inconsistent with the many decisions of the Supreme Court on analogous questions of taxation…
It will hasten mechanization of all processes and thus permanently reduce employment. It will force employers to keep wage rates at the lowest possible minimum and thus reduce the amount of the tax.
Unemployment insurance, which in many instances places a premium on indolence, would unquestionably defeat this proposed plan of the Administration to place workers in the areas of lower living costs and keep them gainfully employed.
[The bill] tends to retard the increase of pay rolls, because of the absorption of this amount of money for taxation purposes; it retards the increase of employment also. It is a permanent tax, with no limit, regardless of economic conditions in general or of the individual company. In other words, it may be the last straw, as I said before, that puts this company over the line into bankruptcy.
