Helvering v Davis:
The plan of the two titles will now be summarized more fully.
Title VIII, as we have said, lays two different types of tax, an "income tax on employees" and "an excise tax on employers." The income tax on employees is measured by wages paid during the calendar year. § 801. The excise tax on the employer is to be paid "with respect to having individuals in his employ," and, like the tax on employees, is measured by wages. § 804. Neither tax is applicable to certain types of employment, such as agricultural labor, domestic service, service for the national or state governments, and service performed by persons who have attained the age of 65 years. § 811(b). The two taxes are at the same rate. §§ 801, 804. For the years 1937 to 1939, inclusive, the rate for each tax is fixed at one percent. Thereafter the rate increases 1/2 of 1 percent every three years, until, after December 31, 1948, the rate for each tax reaches 3 percent.
Ibid. In the computation of wages, all remuneration is to be included except so much as is in excess of $3,000 during the calendar year affected. § 811(a). The income tax on employees is to be collected by the employer, who is to deduct the amount from the wages "as and when paid." § 80a(a). He is indemnified against claims and demands of any person by reason of such payment.
Ibid. The proceeds of both taxes are to be paid into the Treasury like internal revenue taxes generally, and are not earmarked in any way. § 807(a). There are penalties for nonpayment. § 807(c).
Title II has the caption "Federal Old-Age Benefits." The benefits are of two types, first, monthly pensions, and second, lump sum payments, the payments of the second class being relatively few and unimportant.
The first section of this title creates an account in the United States Treasury to be known as the "Old-Age
Page 301 U. S. 636
Reserve Account." § 201. No present appropriation, however, is made to that account. All that the statute does is to authorize appropriations annually thereafter, beginning with the fiscal year which ends June 30, 1937. How large they shall be is not known in advance. The "amount sufficient as an annual premium" to provide for the required payments is
"to be determined on a reserve basis in accordance with accepted actuarial principles, and based upon such tables of mortality as the Secretary of the Treasury shall from time to time adopt, and upon an interest rate of 3 percentum per annum compounded annually."
§ 201(a). Not a dollar goes into the Account by force of the challenged act alone, unaided by acts to follow.
Section 202 and later sections prescribe the form of benefits. The principal type is a monthly pension payable to a person after he has attained the age of 65. This benefit is available only to one who has worked for at least one day in each of at least five separate years since December 31, 1936, who has earned at least $2,000 since that date, and who is not then receiving wages "with respect to regular employment." §§ 202(a), (d), 210(c). The benefits are not to begin before January 1, 1942. § 202(a). In no event are they to exceed $85 a month. § 202(b). They are to be measured (subject to that limit) by a percentage of the wages, the percentage decreasing at stated intervals as the wages become higher. § 202(a). In addition to the monthly benefits, provision is made in certain contingencies for "lump sum payments" of secondary importance. A summary by the Government of the four situations calling for such payments is printed in the margin. [
Footnote 1]
Helvering v Davis
