UNITED STATES v. HATTER, JUDGE, UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, et al.

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557 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, 2001—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 par-
ticipation in a manner that left their total payroll deduction for retire-
ment 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 non-
contributory pension system for federal judges, whose financial obliga-
tions (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 re-
versed. On certiorari, because some Justices were disqualified and this
Court failed to find a quorum, the Federal Circuit’s judgment was af-
firmed “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 judi-
cial salary increase promptly cured any violation, making damages mini-
mal. 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.

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558 UNITED STATES v. HATTER
Syllabus
Held:
1. The Compensation Clause prevents the Government from collect-
ing Social Security taxes, but not Medicare taxes, from federal judges
who held office before Congress extended those taxes to federal employ-
ees. Pp. 565–578.
(a) The Court rejects the judges’ claim that the “law of the case”
doctrine now prevents consideration of the Compensation Clause be-
cause an affirmance by an equally divided Court is conclusive and bind-
ing 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 af-
firming by an equally divided Court. The law of the case doctrine pre-
sumes 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 sin-
gles 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 sala-
ries 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 poten-
tial 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 meas-
ure to counter those threats. Because the Medicare tax is nondiscrimi-
natory, the Federal Circuit erred in finding its application to federal
judges unconstitutional. Pp. 566–572.

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Syllabus
(c) However, because the special retroactivity-related Social Secu-
rity 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, pur-
pose, 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 retire-
ment system and the contributory system to which the other employees
belonged—is unsound because such equalization takes place not by of-
fering all current federal employees (including judges) the same oppor-
tunities 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 argu-
ments—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

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560 UNITED STATES v. HATTER
Opinion of the Court
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, distin-
guished. 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, As-
sistant 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 fed-
eral 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.

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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 So-
cial Security rules that Congress enacted in 1984, however,
effectively singled out then-sitting federal judges for un-
favorable 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 ben-
efits to which many of them eventually became entitled,”
S. Rep. No. 97–494, pt. 1, p. 378 (1982), extended both Medi-
care eligibility and Medicare taxes to all currently employed
federal employees as well as to all newly hired federal em-
ployees, Tax Equity and Fiscal Responsibility Act of 1982,

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562 UNITED STATES v. HATTER
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§ 278, 96 Stat. 559–563. That new law meant that (as of Jan-
uary 1, 1983) all federal judges, like all other federal employ-
ees and most other citizens, would have to contribute be-
tween 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 Re-
form 2–1, 2–7 (Jan. 1983). In particular, the Commission
recommended that Congress require all incoming federal em-
ployees (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 recommen-
dation into law (effective January 1, 1984) with an impor-
tant 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 re-
quired 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-

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strict the freedom of choice of the remaining 4% of all cur-
rent 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 Contribu-
tion 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 then-
current employees) who contributed to a “covered” retire-
ment program nonetheless could choose to modify their
participation in a manner that left their total payroll deduc-
tion—for retirement and Social Security—unchanged. A
“covered” employee paying 7% of salary to a “covered” pro-
gram could continue to pay that 7% and no more, in effect
avoiding any additional financial obligation as a result of join-
ing Social Security.
The exception to the exception defined a “covered” pro-
gram to include the Civil Service Retirement and Disability
System—a program long available to almost all federal em-
ployees—as well as any other retirement system to which an
employee must contribute. §§ 203(a)(2)(A), (D). The defi-
nition of “covered” program, however, did not encompass the
pension system for federal judges—a system that is noncon-
tributory in respect to a judge (but contributory in respect
to a spouse).

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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 remain-
ing 4% to participate in Social Security while freeing them
of any added financial obligation (or additional payroll deduc-
tion) 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 “compen-
sation” 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 re-
versed. 953 F. 2d 626 (CA Fed. 1992). On remand, eight
more judges joined the lawsuit. They contested the exten-
sion 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 re-
versed, ordering summary judgment for the judges as to lia-
bility. 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. Conse-
quently, 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.

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On remand from the Court of Appeals, the Court of Fed-
eral 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 viola-
tion, making damages minimal. 38 Fed. Cl. 166 (1997). The
Court of Appeals (eventually en banc) reversed both deter-
minations. 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. Conse-
quently a quorum was, and is, available to consider the ques-
tions 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 ques-
tion 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).

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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 pre-
sumes 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 con-
sider 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 state-
ment 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 im-
munity 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 ra-
tionale 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,

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as the Court of Appeals noted, this Court did not expressly
overrule Evans itself. 64 F. 3d, at 650. The Court of Ap-
peals added that, if “changes in judicial doctrine” had sig-
nificantly undermined Evans’ holding, this “Court itself
would have overruled the case.” Ibid. Noting that this
case is like Evans (involving judges appointed before enact-
ment of the tax), not like O’Malley (involving judges ap-
pointed 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 preenactment 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 re-
consider 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 “dur-
ing good Behavior,” U. S. Const., Art. III, § 1—the practical
equivalent of life tenure—helps to guarantee what Alexan-
der 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 be-
cause 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.

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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 conse-
quences 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 con-
tribute 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 compensa-
tion 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, Commen-
taries on American Law *294, but more importantly by help-
ing to secure an independence of mind and spirit necessary
if judges are “to maintain that nice adjustment between indi-
vidual rights and governmental powers which constitutes po-
litical liberty,” W. Wilson, Constitutional Government in the
United States 143 (1911).
Chief Justice John Marshall pointed out why this protec-
tion 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

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community, and the poorest and most unpopular.” Proceed-
ings and Debates of the Virginia State Convention, of 1829–
1830, p. 616 (1830). A judge’s decision may affect an individ-
ual’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 con-
tro[l] him but God and his conscience.” Ibid. The “great-
est scourge . . . ever inflicted,” Marshall thought, “was an
ignorant, a corrupt, or a dependent Judiciary.” Id., at 619.
Those who founded the Republic recognized the impor-
tance 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 “com-
pletely 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 “ten-
ure 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 Com-
pensation 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 Compensa-
tion Clause protection by enacting a discriminatory tax law,
for example, that precisely but indirectly achieved the forbid-
den effect.
Nonetheless, we disagree with Evans’ application of Com-
pensation Clause principles to the matter before it—a non-
discriminatory tax that treated judges the same way it
treated other citizens. Evans’ basic holding was that the

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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 possi-
bly be made an instrument to attack his independence as a
judge.” 253 U. S., at 265. Holmes analogized the “diminu-
tion” 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 par-
ties 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 Frank-
furter, 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 govern-
ment,” 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 dif-
ferently, 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

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of his salary within the prohibition of Article III.” Id., at
282. The Court conceded that Miles had reached the oppo-
site 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 reason-
ing 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 reduc-
tion, 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 ef-
fort to influence the judicial will is virtually nonexistent.
Hence, the potential threats to judicial independence that un-
derlie the Constitution’s compensation guarantee cannot jus-
tify 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 nondis-
criminatory tax (including an increase in rates or a change
in conditions) upon judges, whether those judges were ap-
pointed 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.

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572 UNITED STATES v. HATTER
Opinion of the Court
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, inso-
far 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. Respond-
ents argue that the 1983 law imposing that tax upon then-
sitting judges violates the Compensation Clause, for it dis-
criminates 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 every-
one else within the defined classes . . . is subjected” (empha-
sis 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 So-
cial 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, con-
text, statutory purpose, and statutory language, taken to-
gether, 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

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(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 main-
tain their pre-1984 payroll deductions, provided that they
were currently enrolled in a “covered” system. And it de-
fined “covered” system in a way that included virtually all
of that 4%, except for federal judges. See supra, at 563–
564. 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 require-
ment 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 Secu-
rity (due to private sector employment) before becoming
judges. See id., at 115. And participation in Social Secu-
rity as judges would benefit only a minority. See id., at 116–
119 (reviewing examples of individual judges and demon-
strating 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 im-
posed a substantial cost on federal judges with little or no
expectation of substantial benefit for most of them.
Fourth, when measured against Compensation Clause ob-
jectives, the Government’s justification for the statutory dis-
tinction (between judges, who do, and other federal employ-
ees, who do not, incur additional financial obligations) is
unsound. The sole justification, according to the Govern-
ment, is one of “equaliz[ing]” the retirement-related obli-
gations 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

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574 UNITED STATES v. HATTER
Opinion of the Court
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 nec-
essarily 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 non-
contributory because it reflects the fact that the Constitution
itself guarantees federal judges life tenure—thereby consti-
tutionally 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 sal-
ary benefits were themselves part of the judge’s compensa-
tion. 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 disad-
vantage which offsets a constitutionally guaranteed advan-
tage. Hence, to accept the “justification” offered here is to
permit, through similar reasoning, taxes which have the ef-
fect of weakening or eliminating those constitutional guaran-
tees necessary to secure judicial independence, at least inso-
far 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

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Opinion of the Court
here—among advantages and disadvantages—are less dis-
tant 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 gen-
erally 5 U. S. C. § 8334(a)(1). In return it provided a Mem-
ber of Congress, for instance, with a pension that vested
after five years and increased in value (by 2.5% of the Mem-
ber’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 contri-
bution 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 in-
creased 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 mar-
ried federal employee other than a judge had to contribute
7% to 8% of annual salary to receive benefits that were bet-
ter in some respects (vesting period, spousal benefit) and
worse in some respects (80% salary maximum) than his mar-
ried 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 re-
ceived little, or no, financial benefit. Viewed purely in fi-
nancial equalization terms, and as applied to typical judges,
the new requirement seems to overequalize, putting the
typical married judge at a financial disadvantage—though

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576 UNITED STATES v. HATTER
Opinion of the Court
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 disad-
vantageous treatment, in its justification as necessary to off-
set advantages related to constitutionally protected features
of the judicial office, and in the degree of permissible legisla-
tive discretion that would have to underlie any determina-
tion 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 commenta-
tors whose work O’Malley cited said so explicitly. See Fell-
man, 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 indi-
rect efforts to reduce judges’ salaries through taxes when

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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 Legis-
lative Branch employee who had failed to do so. See Tr. of
Oral Arg. 16–17, 37–38. The President’s pension is noncon-
tributory. See note following 3 U. S. C. § 102. And the
President himself, like the judges, is protected against dimi-
nution 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-

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578 UNITED STATES v. HATTER
Opinion of the Court
ple 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 Compen-
sation 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. I.
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 imposi-
tion 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 viola-
tion.” Ibid.
But how could we always decide whether a later salary
increase terminates a constitutional violation without exam-
ining 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

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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 disad-
vantage would perpetuate the very harm that the Compen-
sation Clause seeks to prevent.
The Court of Appeals consequently examined the context
in which the later pay increases took place in order to deter-
mine their relation to the earlier Compensation Clause viola-
tion. It found “nothing to suggest” that the later salary
increase at issue here sought “to make whole the losses sus-
tained 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 suf-
ficiently 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 Sen-
ate Committee on Governmental Affairs, 101st Cong., 1st
Sess., 12–13 (1989) (testimony of Lloyd Cutler regarding ef-
fect of inflation on judges’ salaries since 1969). For instance,
while consumer prices rose 363% between 1969 and 1999, sal-
aries 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 Mem-
bers of Congress themselves some, but not all, of the real
compensation that inflation had eroded. Those salary in-
creases 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 adjust-
ment that the Founders believed “may be requisite,” Mc-
Kean, Debate in Pennsylvania Ratifying Convention, Dec. 11,
1787, in 2 Debates on the Federal Constitution, at 539; see

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580 UNITED STATES v. HATTER
Opinion of the Court
also Rosenn, The Constitutional Guaranty Against Diminu-
tion of Judicial Compensation, 24 UCLA L. Rev. 308, 314–
315 (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 ap-
proach may prove difficult to administer. Brief for United
States 43. And we concede that examining the circum-
stances 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 ap-
proach. 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 con-
stitutionality of certain legislative “freezes” that Congress
had imposed upon earlier enacted Government-wide cost-of-
living salary adjustments. The Court found a Compensa-
tion Clause violation in respect to the freeze for what was
designated Year One (where Congress had rescinded an ear-
lier voted 4.8% salary increase). Will, 449 U. S., at 225–
226. 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 diminish-
ment. Regardless, the very fact that the matter was “un-

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Opinion of Scalia, J.
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 unconstitu-
tional, its judgment is affirmed. We also affirm the Court
of Appeals’ determination that the 1984 salary increase re-
ceived by federal judges did not cure the Compensation
Clause violation. The case is remanded for further proceed-
ings 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 III’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 doc-
trine 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 reme-
died by subsequent salary increases.

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582 UNITED STATES v. HATTER
Opinion of Scalia, J.
I
As an initial matter, I think the Court is right in conclud-
ing 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. Wood-
rough, 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 de-
cision 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 dur-
ing their Continuance in Office”). As we have said, “the
Constitution makes no exceptions for ‘nondiscriminatory’ re-
ductions” 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

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Opinion of Scalia, J.
to prevent invidious (and possibly coercive) action against
judges. But as the Court acknowledges, the Clause “ ‘pro-
mote[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 obvi-
ously yes. Surely the term “compensation” refers to the en-
tire “package” of benefits—not just cash, but retirement ben-
efits, 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 bar-
gain 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 compensa-
tion. In most cases, the presence or absence of taxation
upon wages, like the presence or absence of many other fac-
tors within the control of government—inflation, for exam-
ple, 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 fluctua-
tions 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 Constitu-
tion “placed faith in the integrity and sound judgment of the
elected representatives to enact increases” in judicial sala-

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584 UNITED STATES v. HATTER
Opinion of Scalia, J.
ries to account for inflation). Since Hamilton thought that
the Compensation Clause “put it out of the power of [Con-
gress] to change the condition of the individual [judge] for
the worse,” The Federalist No. 79, at 473, he obviously be-
lieved 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 ma-
terial 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 demon-
strated that the Government was not reducing the compensa-
tion 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 condi-
tioned on federal employment is compensation, and its elimi-
nation 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 im-
possible to understand why a tax that is suspended on the
basis of federal employment (an exemption from federal in-
come tax for federal judges) does not constitute the con-
ferral of compensation—in which case its elimination is a re-
duction, whether or not federal judges end up being taxed
just like other citizens. Only converting the Compensation

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585 Cite as: 532 U. S. 557 (2001)
Opinion of Scalia, J.
Clause into a Discrimination Clause can explain a contrary
conclusion.
And this, of course, is what has been achieved by the tar-
geted 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 em-
ployee) had, prior to 1982, been an exemption from the Medi-
care tax. This benefit Congress took away, much as a pri-
vate 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 employ-
ment would have been reduced, because, with respect to the
newly introduced tax, none had ever existed. But an exten-
sion to federal employees of a tax from which they had pre-
viously 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 enti-
tled” 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”).

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586 UNITED STATES v. HATTER
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 antidiscrimina-
tion 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

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Opinion of Thomas, J.
net compensation violates Article III of the Constitution.
Accordingly, I would affirm the judgment of the Court of
Appeals in its entirety.