Annual report

(New York :  [s.n.],  1942-)

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  1947: Page [No Page Number]  



1938 1939 1940 1941 1942 1943 1944 1945 1946 194]

35-------------------------------------------------
 

fundamental and far-reaching changes in the rail¬
road retirement and unemployment insurance sys¬
tems occasioned by the passage in 1946 of the Crosser
Act, which became effective January 1, 1947.

This act increased the rate of tax payable by the
railroads for retirement and unemployment insur¬
ance benefits to a total of 8% per cent, thus still
further widening the previously existing disparity
between what the railroads are required to pay and
what is paid by other industries for social security
and unemployment benefits.

Payroll taxes heavier

The impact of these payroll taxes on the earnings of
the New York Central has been heavy. The total
amount required to meet them has increased pro¬
gressively in each of the last ten years, from $8,934,-
036 in 1938 to $31,985,446 in 1947 — or more than
4% cents of each revenue dollar received. The new
rates imposed by the Crosser Act increased the pay¬
ment on this account for 1947 alone by $9,183,795
above 1946.

Had we been required to pay for retirement bene¬
fits only at the 1 per cent rate imposed in other
industries, our payroll taxes would have been $17,-
400,000 less than they actually were in 1947. Simi¬
larly, in the case of unemployment insurance taxes,
the rate assessed against the railroads is substan¬
tially in excess of that imposed on industry generally.

Partial relief proposed

Of the several bills now before Congress to amend
the Crosser Act, the ones which seem most likely
to receive consideration in the present Congress are
identical bills which deal only with the unemploy¬
ment insurance system. If enacted, they would elimi¬
nate the wholly unprecedented feature of providing
for the payment, at the sole expense of the employer,
of benefits to employes and former employes for sick¬
ness, injury and maternity, regardless of whether or
not the disability has any connection with the em¬
ployment.

They would substitute for the present 3 per cent
tax imposed upon the railroads to finance the un¬
employment insurance system a sliding scale based
upon the unemployment reserve fund surplus, which
now exceeds $800,000,000.

Bulwinkle-Reed Bill also pending

Another important matter affecting the railroads
remains to be determined by Congress. This is the
so-called Bulwinkle-Reed Bill, now before Congress,
 

32 MILLIONS
 

RAILROAD   RETIREMENT   AN
UNEMPLOYMENT  TAXES
 

which is designed to clarify the law as to the right
of the railroads to maintain joint rate bureaus and
otherwise cooperate in the joint handling of matters
of common concern. This legislation has the full
support of both shippers and carriers, as well as of
governmental authorities other than the anti-trust
division of the Department of Justice.

The Bulwinkle-Reed Bill was passed by the Senate
in the last session of the present Congress, and it is
hoped favorable action will be taken by the House
of Representatives during the present session.

The Central has faith in the essential fairness of
the American people when they fully understand the
issues. It is obvious to anyone familiar with the in¬
dustry that the financial health and serviceability of
the railroads are dependent on sound and enlight¬
ened public policies.

The effort further to inform the American people
concerning the basic issues involved will be carried
forward in 1948 in the hope of a brighter future,
to the benefit of everyone served by and otherwise
dependent on the railroads.
 

J
 

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