OCTOBER TERM, 2000
Syllabus
UNITED STATES
v. HATTER, JUDGE, UNITED STATES DISTRICT
COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL
CIRCUIT
No. 99-1978. Argued February 20, 200l-Decided May 21, 2001
In 1982, Congress extended Medicare to federal employees. That
new law meant,
inter alia, that then-sitting federal judges,
like all other federal employees and most other citizens, began to
have Medicare taxes withheld from their salaries. In 1983, Congress
required all newly hired federal employees to participate in Social
Security and permitted, without requiring, about 96% of the
then-currently employed federal employees to participate in that
program. The remaining 4%-a class consisting of the President,
other high-level Government employees, and all federal judges-were
required to participate, except that those who contributed to a
"covered" retirement program could modify their participation in a
manner that left their total payroll deduction for retirement and
Social Security unchanged, in effect allowing them to avoid any
additional financial obligation as a result of joining Social
Security. A "covered" program was defined to include any retirement
system to which an employee had to contribute, which did not
encompass the noncontributory pension system for federal judges,
whose financial obligations (and payroll deductions) therefore had
to increase. A number of federal judges appointed before 1983 filed
this suit, arguing that the 1983 law violated the Compensation
Clause, which guarantees federal judges a "Compensation, which
shall not be diminished during their Continuance in Office," U. S.
Const., Art. III, § 1. Initially, the Court of Federal Claims ruled
against the judges, but the Federal Circuit reversed. On
certiorari, because some Justices were disqualified and this Court
failed to find a quorum, the Federal Circuit's judgment was
affirmed "with the same effect as upon affirmance by an equally
divided court." 519 U. S. 801. On remand, the Court of Federal
Claims found that the judges' Medicare claims were time barred and
that a 1984 judicial salary increase promptly cured any violation,
making damages minimal. The Federal Circuit reversed, holding that
the Compensation Clause prevented the Government from collecting
Medicare and Social Security taxes from the judges and that the
violation was not cured by the 1984 pay increase.
558
Syllabus
Held:
1. The Compensation Clause prevents the Government from
collecting Social Security taxes, but not Medicare taxes, from
federal judges who held office before Congress extended those taxes
to federal employees. Pp. 565-578.
(a) The Court rejects the judges' claim that the "law of the
case" doctrine now prevents consideration of the Compensation
Clause because an affirmance by an equally divided Court is
conclusive and binding upon the parties.
United States v.
Pink, 315 U.
S. 203, 216, on which the judges rely, concerned an earlier
case in which the Court heard oral argument and apparently
considered the merits before affirming by an equally divided Court.
The law of the case doctrine presumes a hearing on the merits. See,
e. g., Quern v.
Jordan, 440 U. S. 332,347, n. 18.
When this case previously was here, due to absence of a quorum, the
Court could not consider either the merits or whether to consider
those merits through a grant of certiorari. This fact, along with
the obvious difficulty of finding other equivalent substitute
forums, convinces the Court that
Pink does not control here.
Pp. 565-566.
(b) Although the Compensation Clause prohibits taxation that
singles out judges for specially unfavorable treatment, it does not
forbid Congress to enact a law imposing a nondiscriminatory tax
(including an increase in rates or a change in conditions) upon
judges and other citizens. See
O'Malley v.
Woodrough,
307 U. S. 277,
282. Insofar as
Evans v.
Gore, 253 U. S. 245, 255, holds
to the contrary, that case is overruled. See
O'Malley,
supra, at 283. There is no good reason why a judge should not
share the tax burdens borne by all citizens. See
Evans,
supra, at 265, 267 (Holmes, J., dissenting);
O'Malley,
supra, at 281-283. Although Congress cannot
directly
reduce judicial salaries even as part of an equitable effort to
reduce
all Government salaries, a tax law, unlike a law
mandating a salary reduction, affects compensation indirectly, not
directly. See
United States v.
Will, 449 U. S. 200,
226. And those prophylactic considerations that may justify an
absolute rule forbidding direct salary reductions are absent here,
where indirect taxation is at issue. In practice, the likelihood
that a nondiscriminatory tax represents a disguised legislative
effort to influence the judicial will is virtually nonexistent.
Hence, the potential threats to judicial independence that underlie
the Compensation Clause, see
Evans, supra, at 251-252,
cannot justify a special judicial exemption from a commonly shared
tax, not even as a preventive measure to counter those threats.
Because the Medicare tax is nondiscriminatory, the Federal Circuit
erred in finding its application to federal judges
unconstitutional. Pp. 566-572.
559
(c) However, because the special retroactivity-related Social
Security rules enacted in 1983 effectively singled out then-sitting
federal judges for unfavorable treatment, the Compensation Clause
forbids the application of the Social Security tax to those judges.
Four features of the law, taken together, lead to the conclusion
that it discriminates in a manner the Clause forbids. First, the
statutory history, context, purpose, and language indicate that the
category of "federal employees" is the appropriate class against
which the asserted discrimination must be measured. Second, the
practical upshot of defining "covered" system in the way the law
did was to permit nearly every then-current federal employee, but
not federal judges, to avoid the newly imposed obligation to pay
Social Security taxes. Third, the new law imposed a substantial
cost on federal judges with little or no expectation of substantial
benefit for most of them. Inclusion meant a deduction of about
$2,000 per year, whereas 95% of the then-active judges had already
qualified for Social Security (due to private sector employment)
before becoming judges. And participation would benefit only the
minority of judges who had not worked the quarters necessary to be
fully insured under Social Security. Fourth, the Government's sole
justification for the statutory distinction between judges and
other high-level federal employees-i.
e., equalizing the
financial burdens imposed by the noncontributory judicial
retirement system and the contributory system to which the other
employees belonged-is unsound because such equalization takes place
not by offering all current federal employees (including judges)
the same opportunities but by employing a statutory disadvantage
which offsets an advantage related to those protections afforded
judges by the Clause, and because the two systems are not equalized
with any precision. Thus, the 1983 law is very different from the
nondiscriminatory tax upheld in
O'Malley, supra, at 282. The
Government's additional arguments-that Article III protects judges
only against a reduction in stated salary, not against indirect
measures that only reduce take-home pay; that there is no evidence
here that Congress singled out judges for special treatment in
order to intimidate, influence, or punish them; and that the law
disfavored not only judges but also the President and other
high-ranking federal employees-are unconvincing. Pp. 572-578.
2. The Compensation Clause violation was not cured by the 1984
pay increase for federal judges. The context in which that increase
took place reveals nothing to suggest that it was intended to make
whole the losses sustained by the pre-1983 judges. Rather,
everything in the record suggests that the increase was meant to
halt a slide in purchasing power resulting from continued and
unadjusted-for inflation. Although a circumstance-specific approach
is more complex than the Government's
560
proposed automatic approach, whereby a later salary increase
would terminate a Compensation Clause violation regardless of the
increase's purpose, there is no reason why such relief as damages
or an exemption from Social Security would prove unworkable.
Will, supra, distinguished. Pp. 578-581.
203 F.3d
795, affirmed in part, reversed in part, and remanded.
BREYER, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and KENNEDY, SOUTER, and GINSBURG, JJ., joined,
and in which SCALIA, J., joined as to Parts I, II, and V. SCALIA,
J., filed an opinion concurring in part and dissenting in part,
post, p. 581. THOMAS, J., filed an opinion concurring in the
judgment in part and dissenting in part,
post, p. 586.
STEVENS, J., and O'CONNOR, J., took no part in the consideration or
decision of the case.
Paul R. Q. Wolfson argued the cause for the United States. With
him on the briefs were Acting Solicitor General Underwood, former
Solicitor General Waxman, Assistant Attorney General Ogden, Deputy
Solicitor General Kneedler, David M. Cohen, Douglas N. Letter, and
Anne Murphy.
Steven S.
Rosenthal argued the cause for
respondents.
With him on the brief were W Stephen Smith and Ellen E.
Deason.*
JUSTICE BREYER delivered the opinion of the Court.
The Constitution's Compensation Clause guarantees federal judges
a "Compensation, which shall not be diminished during their
Continuance in Office." U. S. Const., Art. III, § 1. The Court of
Appeals for the Federal Circuit held that this Clause prevents the
Government from collecting certain
*Briefs of amici curiae urging affirmance were filed for the
Federal Judges Association by Kevin M. Forde and Richard J.
Prendergast; and for the Los Angeles County Bar Association et al.
by Mark E. Haddad, Catherine V. Barrad, Paul J. Watford, Richard
Walch, Evan A. Davis, Amitai Schwartz, Steven F. Pflaum, Richard
William Austin, Barbara J. Collins, Dennis F. Kerrigan, Jr., P.
Kevin Castel, Herbert H. Franks, Dennis A. Rendelman, and John J.
Kenney.
561
Medicare and Social Security taxes from a small number of
federal judges who held office nearly 20 years ago-before Congress
extended the taxes to federal employees in the early 1980's.
In our view, the Clause does not prevent Congress from imposing
a "non-discriminatory tax laid generally" upon judges and other
citizens,
O'Malley v.
Woodrough, 307 U. S. 277, 282
(1939), but it does prohibit taxation that singles out judges for
specially unfavorable treatment. Consequently, unlike the Court of
Appeals, we conclude that Congress may apply the Medicare tax-a
nondiscriminatory tax-to thensitting federal judges. The special
retroactivity-related Social Security rules that Congress enacted
in 1984, however, effectively singled out then-sitting federal
judges for unfavorable treatment. Hence, like the Court of Appeals,
we conclude that the Clause forbids the application of the Social
Security tax to those judges.
I A
The Medicare law before us is straightforward. In 1965, Congress
created a Federal Medicare "hospital insurance" program and tied
its financing to Social Security. See Social Security Amendments of
1965, 79 Stat. 291. The Medicare law required most American workers
(whom Social Security covered) to pay an additional Medicare tax.
But it did not require Federal Government employees (whom Social
Security did not cover) to pay that tax. See 26 U. S. C. §§
3121(b)(5), (6) (1982 ed.).
In 1982, Congress, believing that "[f]ederal workers should bear
a more equitable share of the costs of financing the benefits to
which many of them eventually became entitled," S. Rep. No. 97-494,
pt. 1, p. 378 (1982), extended both Medicare eligibility and
Medicare taxes to all currently employed federal employees as well
as to all newly hired federal employees, Tax Equity and Fiscal
Responsibility Act of 1982,
562
§ 278,96 Stat. 559-563. That new law meant that (as of January
1, 1983) all federal judges, like all other federal employees and
most other citizens, would have to contribute between 1.30% and
1.45% of their federal salaries to Medicare's hospital insurance
system. See 26 U. S. C. §§ 3101(b)(4)-(6).
The Social Security law before us is more complex. In 1935,
Congress created the Social Security program. See Social Security
Act, 49 Stat. 620. For nearly 50 years, that program covered
employees in the private sector, but it did not cover Government
employees. See 26 U. S. C. §§ 3121(b)(5), (6) (1982 ed.) (excluding
federal employees); § 3121(b)(7) (excluding state employees). In
1981, a National Commission on Social Security Reform, convened by
the President and chaired by Alan Greenspan, noting the need for
"action ... to strengthen the financial status" of Social Security,
recommended that Congress extend the program to cover Federal, but
not state or local, Government employees. Report of the National
Commission on Social Security Reform 2-1, 2-7 (Jan. 1983). In
particular, the Commission recommended that Congress
require
all incoming federal employees (those hired after January 1, 1984)
to enter the Social Security system and to pay Social Security
taxes.
Id., at 2-7. The Commission emphasized that "present
Federal employees will not be affected by this recommendation."
Id., at 2-8.
In 1983, Congress enacted the Commission's recommendation into
law (effective January 1, 1984) with an important exception. See
Social Security Amendments of 1983, § 101(b)(1), 97 Stat. 69
(amending 26 U. S. C. §§ 3121(b)(5), (6)). As the Commission had
recommended, Congress
required all newly hired federal
employees to participate in the Social Security program. It also
permitted, without requiring, almost all (about 96%)
then-currently employed federal employees to participate.
Contrary to the Commission's recommendation, however, the law
added an exception. That exception seemed to re-
563
strict the freedom of choice of the remaining 4% of all current
employees. This class consisted of the President, Vice President,
high-level Executive Branch employees, Members of Congress, a few
other Legislative Branch employees, and all federal judges. See 42
U. S. C. §§ 410(a)(5)(C)-(G); see also H. R. Rep. No. 98-25, p. 39
(1983); H. R. Conf. Rep. No. 98-542, p. 13 (1983) (noting that for
these current federal employees "the rules are being changed in the
middle of the game"). The new law seemed to
require this
class of current federal employees to enter into the Social
Security program, see 42 U. S. C. §§ 410(a)(5)(C)-(G). But, as to
almost all of these employees, the new law imposed no additional
financial obligation or burden.
That is because the new law then created an exception to the
exception, see Federal Employees' Retirement Contribution Temporary
Adjustment Act of 1983, §§ 203(a)(2), 208, 97 Stat. 1107, 1111
(codified at note following 5 U. S. C. § 8331). The exception to
the exception said that any member of this small class of current
high-level officials (4% of all thencurrent employees) who
contributed to a "covered" retirement program nonetheless could
choose to modify their participation in a manner that left their
total payroll deduction-for retirement and Social
Security-unchanged. A "covered" employee paying 7% of salary to a
"covered" program could continue to pay that 7% and no more, in
effect avoiding any additional financial obligation as a result of
joining Social Security.
The exception to the exception defined a "covered" program to
include the Civil Service Retirement and Disability System-a
program long available to almost all federal employees-as well as
any other retirement system to which an employee must contribute.
§§ 203(a)(2)(A), (D). The definition of "covered" program, however,
did not encompass the pension system for federal judges-a system
that is noncontributory in respect to a judge (but contributory in
respect to a spouse).
564
The upshot is that the 1983 law was specifically aimed at
extending Social Security to federal employees. It left about 96%
of those who were currently employed free to choose not to
participate in Social Security, thereby avoiding any increased
financial obligation. It required the remaining 4% to participate
in Social Security while freeing them of any added financial
obligation (or additional payroll deduction) so long as they
previously had participated in other contributory retirement
programs. But it left those who could not participate in a
contributory program without a choice. Their financial obligations
(and payroll deductions) had to increase. And this last mentioned
group consisted almost exclusively of federal judges.
B
This litigation began in 1989, when eight federal judges, all
appointed before 1983, sued the Government for "compensation" in
the United States Claims Court. They argued that the 1983 law, in
requiring them to pay Social Security taxes, violated the
Compensation Clause. Initially, the Claims Court ruled against the
judges on jurisdictional grounds. 21 Cl. Ct. 786 (1990). The Court
of Appeals reversed.
953 F.2d
626 (CA Fed. 1992). On remand, eight more judges joined the
lawsuit. They contested the extension to judges of the Medicare tax
as well.
The Court of Federal Claims held against the judges on the
merits. 31 Fed. Cl. 436 (1994). The Federal Circuit reversed,
ordering summary judgment for the judges as to liability.
64 F.3d
647 (1995). The Government petitioned this Court for a writ of
certiorari. Some Members of this Court were disqualified from
hearing the matter, and we failed to find a quorum of six Justices.
See 28 U. S. C. § 1. Consequently, the Court of Appeals' judgment
was affirmed "with the same effect as upon affirmance by an equally
divided court." 519 U. S. 801 (1996); see 28 U. S. C. § 2109.
565
On remand from the Court of Appeals, the Court of Federal Claims
found (a) that the 6-year statute of limitations, see 28 U. S. C.
§§ 2401(a), 2501, barred some claims, including all Medicare
claims; and (b) that, in any event, a subsequently enacted judicial
salary increase promptly cured any violation, making damages
minimal. 38 Fed. Cl. 166 (1997). The Court of Appeals (eventually
en banc) reversed both determinations.
203 F.3d
795 (CA Fed. 2000).
The Government again petitioned for certiorari. It asked this
Court to consider two questions:
(1) Whether Congress violated the Compensation Clause when it
extended the Medicare and Social Security taxes to the salaries of
sitting federal judges; and
(2) If so, whether any such violation ended when Congress
subsequently increased the salaries of all federal judges by an
amount greater than the new taxes.
Given the specific statutory provisions at issue and the passage
of time, seven Members of this Court had (and now have) no
financial stake in the outcome of this case. Consequentlya quorum
was, and is, available to consider the questions presented. And we
granted the Government's petition for a writ of certiorari.
II
At the outset, the judges claim that the "law of the case"
doctrine prevents us from now considering the first question
presented, namely, the scope of the Compensation Clause. They note
that the Government presented that same question in its petition
from the Court of Appeals' earlier ruling on liability. They point
out that our earlier denial of that petition for lack of a quorum
had the "same effect as" an "affirmance by an equally divided
court," 28 U. S. C. § 2109. And they add that this Court has said
that an affirmance by an equally divided Court is "conclusive and
binding upon the parties as respects that controversy."
United
States v. Pink,
315 U. S. 203, 216
(1942).
566
Pink, however, concerned a case,
United States v.
Moscow Fire Ins. Co., 309 U. S. 624 (1940), in which this
Court had heard oral argument and apparently considered the merits
prior to concluding that affirmance by an equally divided Court was
appropriate. The law of the case doctrine presumes a hearing on the
merits. See,
e. g., Quern v.
Jordan, 440 U. S. 332, 347, n. 18
(1979). This case does not involve a previous consideration of the
merits. Indeed, when this case previously was before us, due to
absence of a quorum, we could not consider either the merits or
whether to consider those merits through grant of a writ of
certiorari. This fact, along with the obvious difficulty of finding
other equivalent substitute forums, convinces us that
Pink's
statement does not control the outcome here, that the "law of the
case" doctrine does not prevent our considering both issues
presented, and that we should now proceed to decide them.
III
The Court of Appeals upheld the judges' claim of tax immunity
upon the authority of
Evans v.
Gore, 253 U. S. 245 (1920).
That case arose in 1919 when Judge Walter Evans challenged
Congress' authority to include sitting federal judges within the
scope of a federal income tax law that the Sixteenth Amendment had
authorized a few years earlier. See Revenue Act of 1918, § 213, 40
Stat. 1065 (defining "gross income" to include judicial salaries).
In
Evans itself, the Court held that the Compensation Clause
barred application of the tax to Evans, who had been appointed a
judge before Congress enacted the tax. 253 U. S., at 264. A few
years later, the Court extended
Evans, making clear that its
rationale covered not only judges appointed before Congress enacted
a tax but also judges whose appointments took place after the tax
had become law. See
Miles v.
Graham, 268 U. S. 501,
509 (1925).
Fourteen years after deciding
Miles, this Court overruled
Miles. O'Malley v.
Woodrough, 307 U. S. 277 (1939).
But,
567
as the Court of Appeals noted, this Court did not expressly
overrule
Evans itself. 64 F. 3d, at 650. The Court of
Appeals added that, if "changes in judicial doctrine" had
significantly undermined
Evans' holding, this "Court itself
would have overruled the case."
Ibid. Noting that this case
is like
Evans (involving judges appointed
before
enactment of the tax), not like
O'Malley (involving judges
appointed
after enactment of the tax), the Court of Appeals
held that
Evans controlled the outcome. 64 F. 3d, at 650.
Hence application of both Medicare and Social Security taxes to
these pre enactment judges violated the Compensation Clause.
The Court of Appeals was correct in applying
Evans to the
instant case, given that "it is this Court's prerogative alone to
overrule one of its precedents."
State Oil Co. v.
Khan, 522 U. S.
3, 20 (1997); see also
Rodriguez de Quijas v.
Shearson/American Express, Inc., 490 U. S. 477, 484
(1989). Nonetheless, the court below, in effect, has invited us to
reconsider
Evans. We now overrule
Evans insofar as it
holds that the Compensation Clause forbids Congress to apply a
generally applicable, nondiscriminatory tax to the salaries of
federal judges, whether or not they were appointed before enactment
of the tax.
The Court's opinion in
Evans began by explaining why the
Compensation Clause is constitutionally important, and we begin by
reaffirming that explanation. As
Evans points out, 253 U.
S., at 251-252, the Compensation Clause, along with the Clause
securing federal judges appointments "during good Behavior," U. S.
Const., Art. III, § i-the practical equivalent of life tenure-helps
to guarantee what Alexander Hamilton called the "complete
independence of the courts of justice." The Federalist No. 78, p.
466 (C. Rossiter ed. 1961). Hamilton thought these guarantees
necessary because the Judiciary is "beyond comparison the weakest
of the three" branches of Government.
Id., at 465-466. It
has "no influence over either the sword or the purse."
Id.,
at 465.
568
It has "no direction either of the strength or of the wealth of
the society."
Ibid. It has "neither FORCE nor WILL but
merely judgment."
Ibid.
Hamilton's view, and that of many other Founders, was informed
by firsthand experience of the harmful consequences brought about
when a King of England "made Judges dependent on his Will alone,
for the tenure of their offices, and the amount and payment of
their salaries." The Declaration of Independence ~ 11. And Hamilton
knew that
"a power over a man's subsistence amounts to a power
over his will." The Federalist No. 79, at 472. For this reason,
he observed, "[n]ext to permanency in office, nothing can
contribute more to the independence of the judges than a fixed
provision for their support."
Ibid.; see also
id.,
No. 48, at 310 (J. Madison) ("[A]s the legislative department alone
has access to the pockets of the people, and has ... full
discretion ... over the pecuniary rewards of those who fill the
other departments, a dependence is thus created in the latter,
which gives still greater facility to encroachments of the
former").
Evans properly added that these guarantees of
compensation and life tenure exist, "not to benefit the judges,"
but "as a limitation imposed in the public interest." 253 U. S., at
253. They "promote the public weal," id., at 248, in part by
helping to induce "learned" men and women "to quit the lucrative
pursuits" of the private sector, 1 J. Kent, Commentaries on
American Law *294, but more importantly by helping to secure an
independence of mind and spirit necessary if judges are "to
maintain that nice adjustment between individual rights and
governmental powers which constitutes politicalliberty," W. Wilson,
Constitutional Government in the United States 143 (1911).
Chief Justice John Marshall pointed out why this protection is
important. A judge may have to decide "between the Government and
the man whom that Government is prosecuting: between the most
powerful individual in the
569
community, and the poorest and most unpopular." Proceedings and
Debates of the Virginia State Convention, of 18291830, p. 616
(1830). A judge's decision may affect an individual's "property,
his reputation, his life, his all."
Ibid. In the "exercise
of these duties," the judge must "observe the utmost fairness."
Ibid. The judge must be "perfectly and completely
independent, with nothing to influence or contro[l] him but God and
his conscience."
Ibid. The "greatest scourge ... ever
inflicted," Marshall thought, "was an ignorant, a corrupt, or a
dependent Judiciary."
Id., at 619.
Those who founded the Republic recognized the importance of
these constitutional principles. See,
e. g., Wilson,
Lectures on Law (1791), in 1 Works of James Wilson 363 (J. Andrews
ed. 1896) (stating that judges should be "completely independent"
in "their salaries, and in their offices"); McKean, Debate in
Pennsylvania Ratifying Convention, Dec. 11, 1787, in 2 Debates on
the Federal Constitution 539 (J. Elliot ed. 1836) (the security of
undiminished compensation disposes judges to be "more easy and
independent"); see also 1 Kent,
supra, at *294 ("[P]ermanent
support" and the "tenure of their office" "is well calculated ...
to give [judges] the requisite independence"). They are no less
important today than in earlier times. And the fact that we
overrule
Evans does not, in our view, diminish their
importance.
We also agree with
Evans insofar as it holds that the
Compensation Clause offers protections that extend beyond a
legislative effort directly to diminish a judge's pay, say, by
ordering a lower salary. 253 U. S., at 254. Otherwise a legislature
could circumvent even the most basic Compensation Clause protection
by enacting a discriminatory tax law, for example, that precisely
but indirectly achieved the forbidden effect.
Nonetheless, we disagree with
Evans' application of
Compensation Clause principles to the matter before it-a
nondiscriminatory tax that treated judges the same way it treated
other citizens.
Evans' basic holding was that the
570
Compensation Clause forbids such a tax because the Clause
forbids "all diminution," including "taxation," "whether for one
purpose or another."
Id., at 255. The Federal Circuit relied
upon this holding. 64 F. 3d, at 650. But, in our view, it is no
longer sound law.
For one thing, the dissenters in
Evans cast the
majority's reasoning into doubt. Justice Holmes, joined by Justice
Brandeis, wrote that the Compensation Clause offers "no reason for
exonerating" a judge "from the ordinary duties of a citizen, which
he shares with all others. To require a man to pay the taxes that
all other men have to pay cannot possibly be made an instrument to
attack his independence as a judge." 253 U. S., at 265. Holmes
analogized the "diminution" that a tax might bring about to the
burden that a state law might impose upon interstate commerce. If
"there was no discrimination against such commerce the tax
constituted one of the ordinary burdens of government from which
parties were not exempted."
Id., at 267.
For another thing, this Court's subsequent law repudiated
Evans' reasoning. In 1939, 14 years after
Miles
extended
Evans' tax immunity to judges appointed after
enactment of the tax, this Court retreated from that extension. See
O'Malley, 307 U. S., at 283 (overruling
Miles). And
in so doing the Court, in an opinion announced by Justice
Frankfurter, adopted the reasoning of the
Evans dissent. The
Court said that the question was whether judges are immune "from
the incidences of taxation to which everyone else within the
defined classes ... is subjected." 307 U. S., at 282. Holding that
judges are not "immun[e] from sharing with their fellow citizens
the material burden of the government," ibid., the Court pointed
out that the legal profession had criticized
Evans' contrary
conclusion, and that courts outside the United States had resolved
similar matters differently, 307 U. S., at 281. And the Court
concluded that "a non-discriminatory tax laid generally on net
income is not, when applied to the income of a federal judge, a
diminution
571
of his salary within the prohibition of Article IlL"
Id.,
at 282. The Court conceded that
Miles had reached the
opposite conclusion, but it said that
Miles "cannot
survive." 307 U. S., at 283. Still later, this Court noted that
"[b]ecause
Miles relied on
Evans v.
Gore,
O'Malley must also be read to undermine the reasoning of
Evans." United States v.
Will, 449 U. S. 200, 227, n. 31
(1980).
Finally, and most importantly, we believe that the reasoning of
Justices Holmes and Brandeis, and of this Court in
O'Malley,
is correct. There is no good reason why a judge should not share
the tax burdens borne by all citizens. We concede that this Court
has held that the Legislature cannot
directly reduce
judicial salaries even as part of an equitable effort to reduce
all Government salaries. See 449 U. S., at 226. But a tax
law, unlike a law mandating a salary reduction, affects
compensation indirectly, not directly. See
ibid.
(distinguishing between measures that directly and those that
indirectly diminish judicial compensation). And those prophylactic
considerations that may justify an absolute rule forbidding direct
salary reductions are absent here, where indirect taxation is at
issue. In practice, the likelihood that a nondiscriminatory tax
represents a disguised legislative effort to influence the judicial
will is virtually nonexistent. Hence, the potential threats to
judicial independence that underlie the Constitution's compensation
guarantee cannot justify a special judicial exemption from a
commonly shared tax, not even as a preventive measure to counter
those threats.
For these reasons, we hold that the Compensation Clause does not
forbid Congress to enact a law imposing a nondiscriminatory tax
(including an increase in rates or a change in conditions) upon
judges, whether those judges were appointed before or after the tax
law in question was enacted or took effect. Insofar as
Evans
holds to the contrary, that case, in
O'Malley's words,
"cannot survive." 307 U. S., at 283.
572
The Government points out that the Medicare tax is just such a
nondiscriminatory tax. Neither the courts below, nor the federal
judges here, argue to the contrary. Hence, insofar as the Court of
Appeals found that application of the Medicare tax law to federal
judges is unconstitutional, we reverse its decision.
IV
The Social Security tax is a different matter. Respondents argue
that the 1983 law imposing that tax upon thensitting judges
violates the Compensation Clause, for it discriminates against
judges in a manner forbidden by the Clause, even as interpreted in
O'Malley, not
Evans. Cf.
O'Malley, supra, at
282 (stating question as whether judges are immune "from the
incidences of taxation
to which everyone else within the defined
classes ... is subjected" (emphasis added)). After examining
the statute's details, we agree with the judges that it does
discriminate in a manner that the Clause forbids. Four features of
the law, taken together, lead us to this conclusion.
First, federal employees had remained outside the Social
Security system for nearly 50 years prior to the passage of the
1983 law. Congress enacted the law pursuant to the Social Security
Commission's recommendation to bring those employees within the
law. See
supra, at 562. And the law itself deals primarily
with that subject. Thus, history, context, statutory purpose, and
statutory language, taken together, indicate that the category of
"federal employees" is the appropriate class against which we must
measure the asserted discrimination.
Second, the law, as applied in practice, in effect imposed a new
financial obligation upon sitting judges, but it did not impose a
new financial burden upon any other group of (then) current federal
employees. We have previously explained why that is so. See
supra, at 562-564. The law required all newly hired federal
employees to join Social Security and pay related taxes. It gave
96% of all current employees
573
(employed as of January 1, 1984, or earlier) total freedom to
enter, or not to enter, the system as they chose. It gave the
remaining 4% of all current employees the freedom to maintain their
pre-1984 payroll deductions, provided that they were currently
enrolled in a "covered" system. And it defined "covered" system in
a way that included virtually all of that 4%, except for federal
judges. See
supra, at 563564. The practical upshot is that
the law permitted nearly every current federal employee, but not
federal judges, to avoid the newly imposed financial
obligation.
Third, the law, by including sitting judges in the system,
adversely affected most of them. Inclusion meant a requirement to
pay a tax of about $2,000 per year, deducted from a monthly salary
check. App. 49. At the same time, 95% of the then-active judges had
already qualified for Social Security (due to private sector
employment) before becoming judges. See id., at 115. And
participation in Social Security as judges would benefit only a
minority. See id., at 116119 (reviewing examples of individual
judges and demonstrating that participation in Social Security
primarily would benefit the minority of judges who had not worked
the 40 quarters necessary to be fully insured). The new law imposed
a substantial cost on federal judges with little or no expectation
of substantial benefit for most of them.
Fourth, when measured against Compensation Clause objectives,
the Government's justification for the statutory distinction
(between judges, who do, and other federal employees, who do not,
incur additional financial obligations) is unsound. The sole
justification, according to the Government, is one of
"equaliz[ing]" the retirement-related obligations that pre-1983 law
imposed upon judges with the retirement-related obligations that
pre-1983 law imposed upon other current high-level federal
employees. Brief for United States 40. Thus the Government says
that the new financial burden imposed upon judges was meant to make
up for the fact that the judicial retirement system is
basically
574
a noncontributory system, while the system to which other
federal employees belonged was a contributory system.
Id.,
at 39-40; Reply Brief for United States 16.
This rationale, however, is the Government's and not necessarily
that of Congress, which was silent on the matter. Cf.
Motor
Vehicle Mfrs. Assn. of United States, Inc. v.
State Farm
Mut. Automobile Ins. Co., 463 U. S. 29, 50 (1983)
(expressing concern at crediting
post hoc explanation of
agency action).
More importantly, the judicial retirement system is
noncontributory because it reflects the fact that the Constitution
itself guarantees federal judges life tenure-thereby
constitutionally permitting federal judges to draw a salary for
life simply by continuing to serve. Cf.
Booth v.
United
States, 291 U. S.
339, 352 (1934) (holding that Compensation Clause protects
salary of judge who has retired). That fact means that a
contributory system, in all likelihood, would not work. And, of
course, as of 1982, the noncontributory pension salary benefits
were themselves part of the judge's compensation. The 1983 statute
consequently singles out judges for adverse treatment solely
because of a feature required by the Constitution to preserve
judicial independence. At the same time, the "equaliz[ation]" in
question takes place not by offering all current federal employees
(including judges) the same opportunities but by employing a
statutory disadvantage which offsets a constitutionally guaranteed
advantage. Hence, to accept the "justification" offered here is to
permit, through similar reasoning, taxes which have the effect of
weakening or eliminating those constitutional guarantees necessary
to secure judicial independence, at least insofar as similar
guarantees are not enjoyed by others. This point would be obvious
were Congress, say, to deny some of the benefits of a tax reduction
to those with constitutionally guaranteed life tenure to make up
for the fact that other employees lack such tenure. Although the
relationships
575
here-among advantages and disadvantages-are less distant and
more complex, the principle is similar.
Nor does the statute "equaliz[e]" with any precision. On the one
hand, the then-current retirement system open to all federal
employees except judges required a typical employee to contribute
7% to 8% of his or her annual salary. See generally 5 U. S. C. §
8334(a)(1). In return it provided a Member of Congress, for
instance, with a pension that vested after five years and increased
in value (by 2.5% of the Member's average salary) with each year of
service to a maximum of 80% of salary, and covered both employee
and survivors. See 5 U. S. C. §§ 8339,8341. On the other hand, the
judges' retirement system (based on life tenure) required no
contribution for a judge who retired at age 65 (and who met certain
service requirements) to receive full salary. But the right to
receive that salary did not vest until retirement. The system
provided nothing for a judge who left office before age 65. Nor did
the law provide any coverage for a judge's survivors. Indeed, in
1984, a judge had to contribute 4.5% of annual salary to obtain a
survivor's annuity, which increased in value by 1.25% of the
judge's salary per year to a maximum of 40% of salary. 28 U. S. C.
§§ 376(b), (l) (1982 ed.).
These two systems were not equal either before or after Congress
enacted the 1983 law. Before 1983, a typical married federal
employee other than a judge had to contribute 7% to 8% of annual
salary to receive benefits that were better in some respects
(vesting period, spousal benefit) and worse in some respects (80%
salary maximum) than his married judicial counterpart would receive
in return for a 4.5% contribution. The 1983 law imposed an added
5.7% burden upon the judge, in return for which the typical judge
received little, or no, financial benefit. Viewed purely in
financial equalization terms, and as applied to typical judges, the
new requirement seems to overequalize, putting the typical married
judge at a financial disadvantage-though
576
perhaps it would produce greater equality when applied to other,
less typical examples.
Taken together, these four characteristics reveal a law that is
special-in its manner of singling out judges for disadvantageous
treatment, in its justification as necessary to offset advantages
related to constitutionally protected features of the judicial
office, and in the degree of permissible legislative discretion
that would have to underlie any determination that the legislation
has "equalized" rather than gone too far. For these reasons the law
before us is very different from the "non-discriminatory" tax that
O'Malley upheld. 307 U. S., at 282. Were the Compensation
Clause to permit Congress to enact a discriminatory law with these
features, it would authorize the Legislature to diminish, or to
equalize away, those very characteristics of the Judicial Branch
that Article III guarantees-characteristics which, as we have said,
see
supra, at 568-569, the public needs to secure that
judicial independence upon which its rights depend. We consequently
conclude that the 1983 Social Security tax law discriminates
against the Judicial Branch, in violation of the Compensation
Clause.
The Government makes additional arguments in support of
reversal. But we find them unconvincing. It suggests that Article
III protects judges only against a reduction in stated salary, not
against indirect measures that only reduce take-home pay. Brief for
United States 28. In
O'Malley, however, this Court, when
upholding a "non-discriminatory" tax, strongly implied that the
Compensation Clause would bar a discriminatory tax. 307 U. S., at
282. The commentators whose work
O'Malley cited said so
explicitly. See Fellman, The Diminution of Judicial Salaries, 24
Iowa L. Rev. 89, 99 (1938); see also Comment, 20 Ill. L. Rev. 376,
377 (1925); Corwin, Constitutional Law in 1919-1920, 14 Am. Pol.
Sci. Rev. 635, 642 (1920). And in Will, the Court yet more strongly
indicated that the Compensation Clause bars indirect efforts to
reduce judges' salaries through taxes when
577
those taxes discriminate. 449 U. S., at 226. Indeed, the
Government itself "assume[s] that discriminatory taxation of judges
would contravene fundamental principles underlying Article III, if
not the [Compensation] Clause itself." Brief for United States 37,
n. 27.
The Government also argues that there is no evidence here that
Congress singled out judges for special treatment in order to
intimidate, influence, or punish them. But this Court has never
insisted upon such evidence. To require it is to invite legislative
efforts that embody, but lack evidence of, some such intent,
engendering suspicion among the branches and consequently
undermining that mutual respect that the Constitution demands. Cf.
Wilson, Lectures on Law, in 1 Works of James Wilson, at 364
(stating that judges "should be removed from the most distant
apprehension of being affected, in their judicial character and
capacity, by anything, except their own behavior and its
consequences"). Nothing in the record discloses anything other than
benign congressional motives. If the Compensation Clause is to
offer meaningful protection, however, we cannot limit that
protection to instances in which the Legislature manifests, say,
direct hostility to the Judiciary.
Finally, the Government correctly points out that the law
disfavored not only judges but also the President of the United
States and certain Legislative Branch employees. As far as we can
determine, however, all Legislative Branch employees were free to
join a covered system, and the record provides us with no example
of any current Legislative Branch employee who had failed to do so.
See Tr. of Oral Arg. 16-17, 37-38. The President's pension is
noncontributory. See note following 3 U. S. C. § 102. And the
President himself, like the judges, is protected against diminution
in his "[c]ompensation." See U. S. Const., Art. II, § 1. These
facts may help establish congressional good faith. But, as we have
said, we do not doubt that good faith. And we do not see why,
otherwise, the separate and special exam-
578
pIe of that single individual, the President, should make a
critical difference here.
We conclude that, insofar as the 1983 statute required
then-sitting judges to join the Social Security system and pay
Social Security taxes, that statute violates the Compensation
Clause.
v
The second question presented is whether the "constitutional
violation ended when Congress increased the statutory salaries of
federal judges by an amount greater than the amount [of the Social
Security] taxes deducted from respondents' judicial salaries." Pet.
for Cert. 1.
The Government argues for an affirmative answer. It points to a
statutory salary increase that all judges received in 1984. It says
that this increase, subsequent to the imposition of Social Security
taxes on judges' salaries, cured any earlier unconstitutional
diminution of salaries in a lesser amount. Otherwise, if "Congress
improperly reduced judges' salaries from $140,000" per year "to
$130,000" per year, the judges would be able to collect the amount
of the improper reduction, here $10,000, forever-even if Congress
cured the improper reduction by raising salaries $20,000, to
$150,000, a year later. Reply Brief for United States 18. To avoid
this consequence, the Government argues, we should simply look to
the fact of a later salary increase "whether or not one of
Congress's purposes in increasing the salaries" was "to terminate
the constitutional violation."
Ibid.
But how could we always decide whether a later salary increase
terminates a constitutional violation without examining the purpose
of that increase? Imagine a violation that affected only a few. To
accept the Government's position would leave those few at a
permanent salary disadvantage. If, for example, Congress reduced
the salaries of one group
579
of judges by 20%, a later increase of 30% applicable to all
judges would leave the first group permanently 20% behind. And a
pay cut that left those judges at a permanent disadvantage would
perpetuate the very harm that the Compensation Clause seeks to
prevent.
The Court of Appeals consequently examined the context in which
the later pay increases took place in order to determine their
relation to the earlier Compensation Clause violation. It found
"nothing to suggest" that the later salary increase at issue here
sought "to make whole the losses sustained by the pre-1983 judges."
185 F. 3d, at 1362-1363. The Government presents no evidence to the
contrary.
The relevant economic circumstances surrounding the 1984, and
subsequent, salary increases include inflation sufficiently serious
to erode the real value of judicial salaries and salary increases
insufficient to maintain real salaries or real compensation parity
with many other private-sector employees. See Report of 1989
Commission on Executive, Legislative, and Judicial Salaries,
Hearings before the Senate Committee on Governmental Affairs, 101st
Cong., 1st Sess., 12-13 (1989) (testimony of Lloyd Cutler regarding
effect of inflation on judges' salaries since 1969). For instance,
while consumer prices rose 363% between 1969 and 1999, salaries in
the private sector rose 421 %, and salaries for district judges
rose 253%. See American Bar Association, Federal Judicial Pay
Erosion 11 (Feb. 2001). These figures strongly suggest that the
judicial salary increases simply reflected a congressional effort
to restore both to judges and to Members of Congress themselves
some, but not all, of the real compensation that inflation had
eroded. Those salary increases amounted to a congressional effort
to adjust judicial salaries to reflect "fluctuations in the value
of money," The Federalist No. 79, at 473 (A. Hamilton)-the kind of
adjustment that the Founders believed "may be requisite," McKean,
Debate in Pennsylvania Ratifying Convention, Dec. 11, 1787, in 2
Debates on the Federal Constitution, at 539; see
580
also Rosenn, The Constitutional Guaranty Against Diminution of
Judicial Compensation, 24 UCLA L. Rev. 308, 314315 (1976).
We have found nothing to the contrary. And we therefore agree
with the Court of Appeals' similar conclusion. 185 F. 3d, at 1363
("[E]verything in the record" suggests that the increase was meant
to halt "the slide in purchasing power resulting from continued and
unadjusted-for inflation").
The Government says that a circumstance-specific approach may
prove difficult to administer. Brief for United States 43. And we
concede that examining the circumstances in order to determine
whether there is or is not a relation between an earlier violation
and a later increase is more complex than the Government's proposed
automatic approach. But we see no reason why such relief as damages
or an exemption from Social Security would prove unworkable.
Finally, the Government looks to our decision in
Will for
support. In that case, federal judges challenged the
constitutionality of certain legislative "freezes" that Congress
had imposed upon earlier enacted Government-wide cost-ofliving
salary adjustments. The Court found a Compensation Clause violation
in respect to the freeze for what was designated Year One (where
Congress had rescinded an earlier voted 4.8% salary increase).
Will, 449 U. S., at 225226. The Government points out that
the
Will Court "noted that Congress, later in that fiscal
year, enacted a statutory increase in judges' salaries that
exceeded the salaries that judges would have received" without the
rescission. Brief for United States 41. And the Government adds
that "it was unquestioned in
Will" that the judges could not
receive damages for the time subsequent to this later enactment.
Id., at 41-42.
The
Will Year One example, however, shows only that, in
the circumstances, and unlike the case before us, the later salary
increase
was related to the earlier salary diminishment.
Regardless, the very fact that the matter was "un-
581
questioned" in
Will shows that it was not argued. See 449
U. S., at 206, n. 3 (noting that the judges' complaint sought
relief for Year One's diminution only up to the moment of the
subsequent salary increase). Hence the Court did not decide the
matter now before us.
We conclude that later statutory salary increases did not cure
the preceding unconstitutional harm.
VI
Insofar as the Court of Appeals found the application of
Medicare taxes to the salaries of judges taking office before 1983
unconstitutional, its judgment is reversed. Insofar as that court
found the application of Social Security taxes to the salaries of
judges taking office before 1984 unconstitutional, its judgment is
affirmed. We also affirm the Court of Appeals' determination that
the 1984 salary increase received by federal judges did not cure
the Compensation Clause violation. The case is remanded for further
proceedings consistent with this opinion.
It is so ordered.
JUSTICE STEVENS and JUSTICE O'CONNOR took no part in the
consideration or decision of this case.
JUSTICE SCALIA, concurring in part and dissenting in part. I
agree with the Court that extending the Social Security tax to
sitting Article III judges in 1984 violated Article Ill's
Compensation Clause. I part paths with the Court on the issue of
extending the Medicare tax to federal judges in 1983, which I think
was also unconstitutional.1
1 I agree with the Court, see Part II,
ante, that the
law-of-the-case doctrine does not bar our consideration of the
merits. I also join the Court in holding, see Part V,
ante,
that any constitutional violation was not remedied by subsequent
salary increases.
582
Opinion of SCALIA, J.
I
As an initial matter, I think the Court is right in concluding
that
Evans v.
Gore, 253 U. S. 245
(1920)-holding that new taxes of general applicability cannot be
applied to sitting Article III judges-is no longer good law, and
should be overruled. We went out of our way in
O'Malley v.
Woodrough, 307
U. S. 277, 280-281 (1939), to catalog criticism of
Evans, and subsequently recognized, in
United States
v.
Will, 449
U. S. 200, 227, and n. 31 (1980), that
O'Malley had
"undermine[d] the reasoning of
Evans." The Court's decision
today simply recognizes what should be obvious: that
Evans
has not only been undermined, but has in fact collapsed.
II
My disagreement with the Court arises from its focus upon the
issue of discrimination, which turns out to be dispositive with
respect to the Medicare tax. The Court holds "that the Compensation
Clause does not forbid Congress to enact a law imposing a
nondiscriminatory tax ... upon judges, whether those judges were
appointed before or after the tax law in question was enacted or
took effect."
Ante, at 571. Since "the Medicare tax is just
such a nondiscriminatory tax," the Court concludes that
"application of [that] tax law to federal judges is
[c]onstitutional."
Ante, at 572.
But we are dealing here with a "Compensation Clause," not a
"Discrimination Clause." See U. S. Const., Art. III, § 1 ("The
Judges ... shall, at stated Times, receive for their Services, a
Compensation, which shall not be diminished during their
Continuance in Office"). As we have said, "the Constitution makes
no exceptions for 'nondiscriminatory' reductions" in judicial
compensation,
Will, supra, at 226. A reduction in
compensation is a reduction in compensation, even if all federal
employees are subjected to the same cut. The discrimination
criterion that the Court uses would make sense if the only purpose
of the Compensation Clause were
583
to prevent invidious (and possibly coercive) action against
judges. But as the Court acknowledges, the Clause "'promote[s] the
public weal' ... by helping to induce 'learned' men and women to
'quit the lucrative pursuits' of the private sector,"
ante,
at 568 (quoting
Evans, supra, at 248; 1 J. Kent,
Commentaries on American Law *294). That inducement would not exist
if Congress could cut judicial salaries so long as it did not do so
discriminatorily.
What the question comes down to, then, is (1) whether exemption
from a certain tax can constitute part of a judge's "compensation,"
and (2) if so, whether exemption from the Medicare tax was part of
the judges' compensation here. The answer to the more general
question seems to me obviously yes. Surely the term "compensation"
refers to the entire "package" of benefits-not just cash, but
retirement benefits, medical care,
and exemption from taxation
if that is part of the employment package. It is simply
unreasonable to think that "$150,000 a year tax-free" (if that was
the bargain struck) is not higher compensation than "$150,000 a
year subject to taxes." Ask the employees of the World Bank.
The more difficult question-though far from an insoluble one-is
when an exemption from tax constitutes compensation. In most
cases, the presence or absence of taxation upon wages, like the
presence or absence of many other factors within the control of
government-inflation, for example, or the rates charged by
government-owned utilities, or import duties that increase consumer
prices-affects the
value of compensation, but is not an
element of compensation itself. The Framers had this distinction
well in mind. Hamilton, for example, wrote that as a result of "the
fluctuations in the value of money," "[i]t was ... necessary to
leave it to the discretion of the legislature to vary its
provisions" for judicial compensation. The Federalist No. 79, p.
473 (C. Rossiter ed. 1961); see also
Will, supra, at 227
(the Constitution "placed faith in the integrity and sound judgment
of the elected representatives to enact increases" in judicial
sala-
584
Opinion of SCALIA, J.
ries to account for inflation). Since Hamilton thought that the
Compensation Clause "put it out of the power of [Congress] to
change the condition of the individual [judge] for the worse," The
Federalist No. 79, at 473, he obviously believed that inflation
does not diminish compensation as that term is used in the
Constitution.
This distinction between Government action affecting
compensation and Government action affecting the
value of
compensation was the basis for our statement in
O'Malley,
supra, at 282, that "[t]o subject [judges] to a general tax is
merely to recognize that judges are also citizens, and that their
particular function in government does not generate an immunity
from sharing with their fellow citizens the material burden of the
government .... " I agree with the Court, therefore, that
Evans was wrongly decided-not, however, because in
Evans there was no discrimination, but because in
Evans the universal application of the tax
demonstrated that the Government was not reducing the
compensation of its judges but was acting as sovereign rather than
employer, imposing a general tax.
But just as it is clear that a federal employee's sharing of a
tax-free status that all citizens enjoy is not compensation (and
elimination of that tax-free status not a reduction in
compensation), so also it is clear that a tax-free status
conditioned on federal employment
is compensation, and its
elimination a reduction. The Court apparently acknowledges that if
a tax is
imposed on the basis of federal employment (an
income tax, for example, payable only by federal judges) it would
constitute a
reduction in compensation. It is impossible to
understand why a tax that is
suspended on the basis of
federal employment (an exemption from federal income tax for
federal judges) does not constitute the
conferral of
compensation-in which case its elimination is a
reduction,
whether or not federal judges end up being taxed just like other
citizens. Only converting the Compensation
585
Clause into a Discrimination Clause can explain a contrary
conclusion.
And this, of course, is what has been achieved by the targeted
extension of the Medicare tax to federal employees who were
previously exempt. It may well be that, in some abstract sense,
they are not being "discriminated against," since they end up being
taxed like other citizens; but this does not alter the fact that,
since exemption from the tax was part of their employment
package-since they had an employment expectation of a preferential
exemption from taxation-their
compensation was being
reduced. One of the benefits of being a federal judge (or any
federal employee) had, prior to 1982, been an exemption from the
Medicare tax. This benefit Congress took away, much as a private
employer might terminate a contractual commitment to pay Medicare
taxes on behalf of its employees. The latter would clearly be a cut
in compensation, and so is the former.2 Had Congress simply imposed
the Medicare tax on its own employees (including judges) at the
time it introduced that tax for other working people, no benefit of
federal employment would have been reduced, because, with respect
to the newly introduced tax, none had ever existed. But an
extension to federal employees of a tax from which they had
previously been exempt
by reason of their employment status
seems to me a flat-out reduction of federal employment
compensation.
2 As the Court explains, the purpose of the Medicare tax
extension was to ensure that federal workers "bear a more equitable
share of the costs of financing the benefits to which many of them
eventually became entitled" by reason of their own or their
spouses' private-sector employment.
Ante, at 561 (internal
quotation marks and citation omitted). As with the Social Security
tax, therefore, the Medicare tax aspect of this case does not
present the situation in which a tax exemption has been eliminated
in return for some other benefit, different in kind but equivalent
in value. Cf.
ante, at 573 ("[P]articipation in Social
Security as judges would benefit only a minority").
586
Opinion of THOMAS, J.
III
As should be clear from the above, though I agree with the Court
that the extension of the Social Security tax to federal judges
runs afoul of the Compensation Clause, I disagree with the Court's
grounding of this holding on the discriminatory manner in which the
extension occurred. In this part of its opinion, however, the
Court's antidiscrimination rationale is slightly different from
that which appeared in its discussion of the Medicare tax. There,
the focus was on discrimination compared with ordinary citizens;
here, the focus is on discrimination vis-a-vis other federal
employees. (As the Court explains, federal judges, unlike nearly
all other federal employees, were not given the opportunity to opt
out of paying the tax.) On my analysis, it would not matter if
every federal employee had been made subject to the Social Security
tax along with judges, so long as one of the previous entitlements
of their federal employment had been exemption from that tax.
Federal judges, unlike all other federal employees except the
President, see Art. II, § 1, cl. 7, cannot, consistent with the
Constitution, have their compensation diminished. If this case
involved salary cuts to pay for Social Security, rather than taxes
to pay for Social Security, the irrelevance of whether other
federal employees were covered by the operative legislation would
be clear.
***
I join in the judgment that extension of the Social Security tax
to sitting Article III judges was unconstitutional. I would affirm
the Federal Circuit's holding that extension of the Medicare tax
was unconstitutional as well.
JUSTICE THOMAS, concurring in the judgment in part and
dissenting in part.
I believe this Court was correct in
Evans v.
Gore,
253 U. S. 245
(1920), when it held that any tax that reduces a judge's
587
net compensation violates Article III of the Constitution.
Accordingly, I would affirm the judgment of the Court of Appeals in
its entirety.
Comments
Be the first to comment
Leave a Comment