United States v. Hatter

Compensation Clause

Question(s) Presented

“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 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 then-sitting 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.”