United States v. Hatter
The Supreme Court ruled that Congress could require sitting federal judges to pay the new Medicare tax just like everyone else, but could not apply the 1983 Social Security tax to them because that law let almost every other federal worker avoid the new cost while judges alone had no way out.
In reaching this result, the Court overruled its 1920 decision Evans v. Gore, which had shielded judges from any new tax at all, and replaced it with a rule that ordinary, evenly-applied taxes are fine but taxes that single judges out for worse treatment are not.
“There is no good reason why a judge should not share the tax burdens borne by all citizens.”
The Court's core rationale for allowing a nondiscriminatory tax to apply to judges.
How it got here: The Court of Federal Claims ruled for the government, but the Federal Circuit reversed for the judges on both taxes; the government sought and the Supreme Court granted certiorari.
The Case in Depth
What happened
A group of federal judges appointed before Congress extended Medicare and Social Security taxes to federal employees sued the government, arguing that making them start paying those taxes cut their pay in violation of the Constitution's guarantee that judicial compensation cannot be diminished while they remain in office. The government argued the taxes were valid revenue measures applicable to nearly everyone.
The question before the Court
Could Congress make sitting federal judges start paying Medicare and Social Security payroll taxes without cutting their constitutionally protected pay?
Why it matters
The ruling clarifies that judges are not tax-exempt citizens simply because of their office, so future evenly-applied taxes can reach judicial salaries. But it also protects judges from being singled out by name or by a law's fine print for worse financial treatment than other government workers, preserving a safeguard against Congress using tax rules to pressure the courts.
What changes now
The case returns to the lower courts to work out the remedy for the judges who were unconstitutionally required to pay Social Security taxes, since the Court held that later salary increases did not erase that harm. The Medicare tax remains valid and continues to apply to federal judges. This is a final merits ruling on the constitutional questions, though remedial proceedings on damages continue below.
What this does not decide
The Court did not decide that judges are immune from taxes generally — only that a tax singling judges out for worse treatment than comparable federal employees violates the Constitution. It also did not decide the exact amount of relief owed to the judges who paid the Social Security tax; that was left for further proceedings.
Concurrences and dissents
Concurrence in part — Justice Scalia
Justice Scalia agreed the Social Security tax was unconstitutional and that Evans v. Gore should be overruled, and agreed later salary increases did not cure the violation. But he rejected the majority's discrimination-based test entirely, arguing the Compensation Clause protects the value of a judge's total compensation package, including any tax exemption that was part of the employment deal, so taking away the Medicare exemption judges had enjoyed since 1965 was itself an unconstitutional pay cut regardless of whether the tax applied to everyone else too.
Dissent in part — Justice Thomas
Justice Thomas argued Evans v. Gore was correctly decided and should not have been overruled: any tax that reduces a judge's net take-home pay violates the Compensation Clause, whether or not the tax also applies to other citizens. On that reasoning he would have affirmed the Federal Circuit's judgment in full, holding both the Medicare and Social Security taxes unconstitutional as applied to sitting judges.
How the Court got there
The legal reasoning, step by step
- The Court first revisited Evans v. Gore, its 1920 precedent holding that the Compensation Clause bars any new tax from reaching a sitting judge's salary, and concluded that decades of criticism and the Court's own later decision in O'Malley v. Woodrough had left Evans without any remaining support, so the Court exercised its exclusive power to overrule its own precedent.
- The Court adopted the rule that the Compensation Clause forbids Congress from directly cutting judicial pay and also forbids indirect cuts achieved by taxing judges more harshly than other citizens, but it does not forbid a tax that applies evenly to judges and the public alike.
- Applying that rule to the Medicare tax, the Court found the tax applied uniformly to virtually all federal employees and most other workers, with no special burden singling out judges, so it passed muster as an ordinary, nondiscriminatory tax.
- Applying the same rule to the 1983 Social Security law, the Court found that the law let 96% of then-current federal employees opt out of any new financial burden and let most of the remaining 4% avoid any new cost through an exception for people already in other contributory retirement plans, while judges alone were excluded from that escape valve solely because their pension system was noncontributory by constitutional design.
- The Court rejected the government's claim that this distinction merely 'equalized' judges with other employees, reasoning that the justification effectively penalized judges for a feature of judicial tenure the Constitution itself requires, and that the numbers did not actually produce equal treatment in practice.
- Turning to whether a later 1984 pay raise erased the harm, the Court held that a subsequent salary increase cures an earlier unconstitutional reduction only if the increase was actually intended to offset that reduction, and found the record showed the 1984 raise was meant only to counter inflation, not to remedy the Social Security tax's effect on pre-1984 judges.
Doctrinal impact
Cases affected by this decision
Overrules Evans v. Gore (253 U.S. 245)
The Court overruled its 1920 ruling that had shielded sitting judges from any new tax whatsoever.
Reaffirms O'Malley v. Woodrough (307 U.S. 277)
The Court relied on this 1939 decision's rule that nondiscriminatory taxes may apply to judges.
Distinguishes Miles v. Graham (268 U.S. 501)
The Court noted this case extending Evans had already been overruled by O'Malley and was not revived.