1. The provision of § 22(a) of the Revenue Act of 1936,
requiring that there be included in gross income, for the purpose
of computing the federal income tax, the compensation of "judges of
courts of the United States taking office after June 6, 1932" --
which provision was a reenactment of a similar provision contained
in the Revenue Act of June 6, 1932, and part of a taxing measure of
general, nondiscriminatory application to all earners of income, --
held constitutional as applied to a judge who was
appointed to
Page 307 U. S. 278
the Circuit Court of Appeals subsequently to June 6, 1932. P.
307 U. S.
281.
2. The provision in question cannot be regarded as effecting a
diminution of the compensation of the judge in violation of the
Constitution, Art. III, § 1, nor as an encroachment on the
independence of the judiciary. P.
307 U. S.
282.
Congress did not exceed its constitutional power in providing
that United States judges appointed after the Revenue Act of 1932
shall not enjoy immunity from the incidences of taxation to which
everyone else within the defined classes of income is
subjected.
3. The fact that, at the time of the judge's appointment to the
Circuit Court of Appeals, he held the office of federal district
judge, to which he had been appointed prior to June 6, 1932, is
irrelevant to the matter in issue. P.
307 U. S.
279.
Reversed.
Appeal under § 2 of the Act of Aug. 24, 1937, from a judgment of
the District Court denying the Government's motion to dismiss a
suit for a refund of income taxes collected under an allegedly
unconstitutional Act.
MR. JUSTICE FRANKFURTER delivered the opinion of the Court.
The case is here under § 2 of the Act of August 24, 1937 (50
Stat. 751) as a direct appeal from a judgment of a district court
whose "decision was against the constitutionality" of an Act of
Congress. The suit below, an action at law to recover a tax on
income claimed to have been illegally exacted, was disposed of upon
the pleadings, and turned on the single question now before us,
to-wit: is the provision of § 22 of the Revenue Act of 1932,
Page 307 U. S. 279
47 Stat. 169, 178, reenacted by § 22(a) of the Revenue Act of
1936, 49 Stat. 1648, 1657, constitutional insofar as it included in
the "gross income," on the basis of which taxes were to be paid,
the compensation of "judges of courts of the United States taking
office after June 6, 1932."
That this is the sole issue will emerge from a simple statement
of the facts and of the governing legislation. Joseph W. Woodrough
was appointed a United States circuit judge on April 12, 1933, and
qualified as such on May 1, 1933. For the calendar year of 1936, a
joint income tax return of Judge Woodrough and his wife disclosed
his judicial salary of $12,500, but claimed it to be
constitutionally immune from taxation. Since it was not included in
"gross income," no tax was payable. Subsequently, a deficiency of
$631.60 was assessed on the basis of that item, which, with
interest, was paid under protest. Claim for refund having been
rejected, the present suit was brought, and judgment went against
the Collector. The assessment of the present tax was technically
under the Act of 1936, but that Act merely carried forward the
provisions of the Act of 1932 for the inclusion of compensation of
"judges of courts of the United States taking office after June 6,
1932" which had been similarly incorporated in the Revenue Act of
1934 (48 Stat. 680, 686, 687). Therefore, the power of Congress to
include Judge Woodrough's salary as a circuit judge in his "gross
income" must be judged on the basis of the validity of § 22 of the
Revenue Act of 1932, and not as though that power had been
originally asserted by the Revenue Act of 1936. For it was the Act
of June 6, 1932, that gave notice to all judges thereafter to be
appointed of the new Congressional policy to include the judicial
salaries of such judges in the assessment of income taxes. The fact
that Judge Woodrough, before he became a circuit judge and prior to
June 6, 1932, had been a district judge
Page 307 U. S. 280
is wholly irrelevant to the matter in issue. The two offices
have different statutory origins, are filled by separate
nominations and confirmations, and enjoy different emoluments. A
new appointee to a circuit court of appeals occupies a new office
no less when he is taken from the district bench than when he is
drawn from the bar.
By means of § 22 of the Revenue Act of 1932, Congress sought to
avoid, at least in part, the consequences of
Evans v.
Gore, 253 U. S. 245.
That case, decided on June 1, 1920, ruled for the first time that a
provision requiring the compensation received by the judges of the
United States to be included in the "gross income" from which the
net income is to be computed, although merely part of a taxing
measure of general, nondiscriminatory application to all earners of
incomes, is contrary to Article III, § 1 of the Constitution, which
provides that the "Compensation" of the "Judges" "shall not be
diminished during their Continuance in Office."
See also
the separate opinion of Mr. Justice Field in
Pollock v.
Farmers' Loan & Trust Co., 157 U.
S. 429,
157 U. S. 586,
157 U. S. 604
et seq. To be sure, in a letter to Secretary Chase, Chief
Justice Taney expressed similar views. [
Footnote 1] In doing so, he merely gave his extrajudicial
opinion, asserting at the same time that the question could not be
adjudicated. [
Footnote 2] Chief
Justice Taney's vigorous views were shared by Attorney General
Hoar. [
Footnote 3] Thereafter,
both the Treasury Department [
Footnote 4] and Congress [
Footnote 5]
Page 307 U. S. 281
acted upon this construction of the Constitution. However, the
meaning which
Evans v. Gore, supra, imputed to the history
which explains Article III, § 1, was contrary to the way in which
it was read by other English-speaking courts. [
Footnote 6] The decision met wide and steadily
growing disfavor from legal scholarship and professional opinion.
[
Footnote 7]
Evans v. Gore,
supra, itself was rejected by most of the courts before whom
the matter came after that decision. [
Footnote 8]
Having regard to these circumstances, the question immediately
before us is whether Congress exceeded its constitutional power in
providing that United States judges
Page 307 U. S. 282
appointed after the Revenue Act of 1932 shall not enjoy immunity
from the incidences of taxation to which everyone else within the
defined classes of income is subjected. Thereby, of course,
Congress has committed itself to the position that a
nondiscriminatory tax laid generally on net income is not, when
applied to the income of a federal judge, a diminution of his
salary within the prohibition of Article III, § 1, of the
Constitution. To suggest that it makes inroads upon the
independence of judges who took office after Congress had thus
charged them with the common duties of citizenship, by making them
bear their aliquot share of the cost of maintaining the Government,
is to trivialize the great historic experience on which the framers
based the safeguards of Article III, § 1. [
Footnote 9] To subject them 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 whose Constitution and laws they are charged with
administering.
After this case came here, Congress, by § 3 of the Public Salary
Tax Act of 1939, amended § 22(a) so as to make it applicable to
"judges of courts of the United States who took office on or before
June 6, 1932 " [
Footnote 10]
That section, however, is not now before us. But, to the extent
Page 307 U. S. 283
that what the Court now says is inconsistent with what was said
in
Miles v. Graham, 268 U. S. 501, the
latter cannot survive.
Judgment reversed.
MR. JUSTICE McREYNOLDS did not hear the argument in this cause,
and took no part in its consideration or decision.
[
Footnote 1]
The letter was written on February 16, 1863, and will be found
in 157 U.S. 701.
[
Footnote 2]
". . . I should not have troubled you with this letter if there
was any mode by which the question could be decided in a judicial
proceeding. But all of the judges of the courts of the United
States have an interest in the question, and could not therefore
with propriety undertake to hear and decide it."
157 U.S. at 702.
[
Footnote 3]
13 Op.Attys.Gen. 161;
but see the opinion of Attorney
General Palmer, 31 Op.Attys.Gen. 475.
[
Footnote 4]
See Mr. Justice Field, concurring, in
Pollock v.
Farmers' Loan & Trust Co., 157 U.
S. 429,
157 U. S. 588,
157 U. S.
606-607.
[
Footnote 5]
See Wayne v. United States, 26 Ct.Cls. 274; Act of July
28, 1892, c. 311, 27 Stat. 306.
[
Footnote 6]
See Judgments in
Cooper v. Commissioner of Income
Tax, 4 Comm.L.R. 1304, construing § 17 of the Queensland
Constitution Act of 1867, which prohibited "any reduction or
diminution of the salary of a Judge during his Term of office;"
also, Judges v. Attorney General for Saskatchewan, [1937]
2 D.L.R. 209, construing § 96 of the British North America Act,
1867, that "The Salaries . . . of the Judges . . . shall be fixed
and provided by the Parliament of Canada" in connection with the
Income Tax Act, 1932, of Saskatchewan.
[
Footnote 7]
See Clark, Further Limitations Upon Federal Income
Taxation, 30 Yale L.J.; Corwin, Constitutional Law in 1919-1920, 15
Am.Pol.Sci.Rev. 635, 641-644; Fellman, Diminution of Judicial
Salaries, 24 Iowa L.Rev. 89; Lowndes, Taxing Income of Federal
Judiciary, 19 Va.L.Rev. 153; Powell, Constitutional Law in
1919-1920, 19 Mich.L.Rev. 117-118; Powell, The Sixteenth Amendment
and Income from State Securities, National Income Tax Magazine
(July 1923) 5-6; 20 Col.L.Rev. 794; 43 Harv.L.Rev. 318; 20
Ill.L.Rev. 376; 45 L.Q.Rev. 291; 7 Va.L.Rev. 69; 3 U. of Chi.L.Rev.
141.
[
Footnote 8]
The cases pro and con are collected in the recent dissenting
opinion by Chief Judge Bond of the Court of Appeals of Maryland in
Gordy v. Dennis, 5 A.2d 69, 82. Particular attention
should be called to the decision of the Supreme Court of South
Africa,
Krause v. Commissioner for Inland Revenue, [1929],
So.Afr.R. (A.D.) 286, construing § 100 of the South Africa Act,
which had taken over the identical clause from Article III, § 1, of
our Constitution.
[
Footnote 9]
The provisions regarding security of salary had their source in
the Act of Settlement of 1700, 12 & 13 Will. III, c. 2, § III,
and the Act of 1760, 1 Geo. III, c. 23.
See Holdsworth,
The Constitutional Position of the Judges, 48 L.Q.Rev. 25; 2
Holdsworth, The History of English Law, 559-64; 6 id. 234, 514.
[
Footnote 10]
Public No. 32, 76th Cong., 1st Sess., c. 59. Section 209 of the
same statute, however, provides that,
"In the case of the judges of the Supreme Court, and of the
inferior courts of the United States created under article III of
the Constitution, who took office on or before June 6, 1932, the
compensation received as such shall not be subject income tax under
the Revenue Act of 1938 or any prior revenue Act."
MR. JUSTICE BUTLER, dissenting.
Concretely, the question is whether, by exacting from United
States Circuit Judge Joseph W. Woodrough and his wife $631.60 in
the form of income tax on his salary of $12,500 for 1936, the
government diminished the compensation for his services theretofore
fixed by Congress. That item excluded, they had no taxable income.
The judge's monthly pay was $1,041.66. The tax took at the monthly
rate of $52.63.
The material details may be given briefly.
April 12, 1933, Judge Woodrough was appointed judge of the
United States circuit court of appeals for the eighth circuit. He
qualified May 1, 1933. Congress had, by the Act of December 13,
1926, [
Footnote 2/1] enacted that
"To each of the circuit judges, the sum of $12,500 per year" shall
be paid as compensation. Since May 1, 1933, appellee has received
the specified pay. The Revenue Act of June 6, 1932, applicable only
to taxable years beginning after December 31, 1931, contained a
provision declaring that, in the case of judges taking office after
that date,
"the compensation received as such shall be included in gross
income, and all Acts fixing the compensation of such . . . judges
are hereby amended accordingly. [
Footnote 2/2]"
The Revenue Act of 1934, [
Footnote
2/3] applicable only to taxable
Page 307 U. S. 284
years beginning after December 31, 1933, and that of 1936,
[
Footnote 2/4] applicable only to
taxable years beginning after December 31, 1935, contain the same
language as that just quoted from the Act of 1932.
Judge Woodrough and his wife made a joint income tax return for
1936; it disclosed his salary, but claimed it was not subject to
the tax. The commissioner held the item taxable, and made a
deficiency assessment of $631.60. Plaintiffs paid under protest and
filed claim for refund; it was denied. Claiming the tax that they
were so compelled to pay diminished the judge's compensation, and
that therefore § 22(a) of the Act of 1936 violates § 1, Art. III,
of the Constitution, plaintiffs sued to recover the amount of the
tax. The collector moved to dismiss. The court held the Act
unconstitutional, overruled the motion, and, defendant having
elected not to plead further, gave plaintiffs judgment as prayed.
Defendant appealed. [
Footnote
2/5]
Article III, § 1, declares:
"The Judges, both of the supreme and inferior Courts, shall hold
their Offices during good behaviour, and shall at stated Times,
receive for their Services, a Compensation, which shall not be
diminished during their Continuance in Office."
It safeguards the independence of the judiciary. The abuse
against which it was intended to be a barrier is included in the
list of reasons for our Declaration of Independence.
"The history of the present King of Great Britain is a history
of repeated injuries and usurpations, all having in direct object
the establishment of an absolute Tyranny over these States. . . .
He has obstructed the Administration of Justice by refusing his
Assent to Laws for establishing Judiciary powers. He has made
Judges dependent on his Will alone, for the
Page 307 U. S. 285
tenure of their offices, and the amount and payment of their
salaries."
Alexander Hamilton, explaining the reasons for and the purpose
of § 1 of Art. III, said:
"The Executive not only dispenses the honors, but holds the
sword of the community. The legislature not only commands the
purse, but prescribes the rules by which the duties and rights of
every citizen are to be regulated. The judiciary, on the contrary,
has no influence over either the sword or the purse; no direction
either of the strength or of the wealth of the society, and can
take no active resolution whatever. It may truly be said to have
neither force nor will, but merely judgment. . . ."
"This simple view of the matter . . . proves incontestably that
the judiciary is, beyond comparison, the weakest of the three
departments of power, that it can never attack with success either
of the other two, and that all possible care is requisite to enable
it to defend itself against their attacks. . . ."
"The complete independence of the courts of justice is
peculiarly essential in a limited Constitution. By a limited
Constitution, I understand one which contains certain specified
exceptions to the legislative authority -- such, for instance, as
that it shall pass no bills of attainder, no
ex post facto
laws, and the like. Limitations of this kind can be preserved in
practice no other way than through the medium of courts of justice,
whose duty it must be to declare all acts contrary to the manifest
tenor of the Constitution void. Without this, all the reservations
of particular rights or privileges would amount to nothing. . .
."
The Federalist, No. 78.
"Next to permanency in office, nothing can contribute more to
the independence of the judges than a fixed provision for their
support. . . . In the general course of human nature, a power over
a man's subsistence amounts
Page 307 U. S. 286
to a power over his will. . . . The enlightened friends to good
government in every State have seen cause to lament the want of
precise and explicit precautions in the State constitutions on this
head. Some of these indeed have declared that permanent salaries
should be established for the judges, but the experiment has in
some instances shown that such expressions are not sufficiently
definite to preclude legislative evasions. Something still more
positive and unequivocal has been evinced to be requisite. . . .
This provision for the support of the judges bears every mark of
prudence and efficacy, and it may be safely affirmed that, together
with the permanent tenure of their offices, it affords a better
prospect of their independence than is discoverable in the
constitutions of any of the States in regard to their own
judges."
The Federalist, No. 79.
Mr. Justice Story declared that "Without this provision, the
other, as to the tenure of office, would have been utterly
nugatory, and indeed a mere mockery. . . ." 2 Story, § 1628.
Chancellor Kent said:
"The provision for the permanent support of the judges is well
calculated, in addition to the tenure of their office, to give them
the requisite independence. It tends also to secure a succession of
learned men on the bench who, in consequence of a certain
undiminished support, are enabled and induced to quit the lucrative
pursuits of private business for the duties of that important
station. The constitution of the United States, on this subject,
was an improvement upon all our previously existing
constitutions."
1 Kent Com. 294.
The first judicial construction of the clause was by the circuit
court of the District of Columbia in 1803, in the case of
United States v. More. [
Footnote 2/6] The opinion was written by Judge Cranch.
The court sustained a demurrer to an
Page 307 U. S. 287
indictment charging that More, a justice of the peace, under
color of his office, exacted an illegal fee, 12 cents, for giving
judgment upon a warrant for a small debt. The issue was whether an
Act of Congress abolishing fees of justices of the peace in the
District of Columbia could affect those who accepted their
commissions while the fees were legally annexed to the office. The
court said:
"The 3d article of the constitution provides for the
independence of the judges of the courts of the United States by
certain regulations, one of which is that they shall receive, at
stated times, a compensation for their services which shall not be
diminished during their continuance in office. The act of Congress
of 27th of February, 1801, which constitutes the office of justices
of the peace . . . ascertains the compensation which they shall
have for their services in holding their courts. . . . This
compensation is given in the form of fees, payable when the
services are rendered. . . . [T]hat his [the justice's]
compensation shall not be diminished during his continuance in
office seems to follow as a necessary consequence from the
provisions of the constitution. . . . If his compensation has once
been fixed by law, a subsequent law for diminishing that
compensation (
a fortiori for
abolishing it)
cannot affect that justice of the peace during his continuance in
office. . . ."
The first attempt to tax compensation of federal judges was
during the Civil War. Section 86 of the Act of July 1, 1862,
[
Footnote 2/7] levied
"on all salaries of officers, or payments to persons in the . .
. service of the United States . . . when exceeding the rate of six
hundred dollars per annum, a duty of three percentum on the excess
above the said six hundred dollars,"
and directed disbursing officers to deduct and withhold the
duty. These general provisions were construed by the revenue
Page 307 U. S. 288
officers to comprehend the compensation of the President and the
judges of the United States. By letter of February 16, 1863, Mr.
Chief Justice Taney protested to the Secretary of the Treasury. In
the course of his letter, [
Footnote
2/8] he said:
"The act in question, as you interpret it, diminishes the
compensation of every judge three percent, and if it can be
diminished to that extent by the name of a tax, it may in the same
way be reduced from time to time at the pleasure of the
legislature."
"The Judiciary is one of the three great departments of the
government, created and established by the Constitution. Its duties
and powers are specifically set forth, and are of a character that
requires it to be perfectly independent of the two other
departments, and, in order to place it beyond the reach and above
even the suspicion of any such influence, the power to reduce their
compensation is expressly withheld from Congress, and excepted from
their powers of legislation."
"Language could not be more plain than that used in the
Constitution. It is, moreover, one of its most important and
essential provisions. For the articles which limit the powers of
the legislative and executive branches of the government, and those
which provide safeguards for the protection of the citizen in his
person and property, would be of little value without a judiciary
to uphold and maintain them which was free from every influence,
direct or indirect, that might by possibility in times of political
excitement warp their judgments. . . ."
"Having been honored with the highest judicial station under the
Constitution, I feel it to be more especially my duty to uphold and
maintain the constitutional rights of that department of the
government, and not, by any act or word of mine, leave it to be
supposed that I acquiesce in a measure that displaces it from the
independent position
Page 307 U. S. 289
assigned it by the statesmen who framed the Constitution, and,
in order to guard against any such inference, I present to you this
respectful but firm and decided remonstrance against the authority
you have exercised under this act of Congress, and request you to
place this protest upon the public files of your office as the
evidence that I have done everything in my power to preserve and
maintain the Judicial Department in the position and rank in the
government which the Constitution has assigned to it."
The letter of the Chief Justice was not answered, and, at his
request, the Court, May 10, 1863, ordered the letter entered on its
records. In 1869, the Secretary of the Treasury requested the
opinion of Attorney General Ebenezer Rockwood Hoar as to the
constitutionality of the Act construed to extend to judges'
salaries. He rendered an opinion in substantial accord with the
views expressed in Chief Justice Taney's protest. 13 Op.Attys.Gen.
161. Accordingly, the tax on the compensation of the President and
of judges was discontinued, and the amounts theretofore collected
from them were refunded -- some through administrative channels,
others through action of the court of claims and ensuing
appropriations by Congress.
See Wayne v. United States, 26
Ct.Cls. 274, 290; 27 Stat. 306.
In 1889, Mr. Justice Miller, a member of the Court since 1862,
said: [
Footnote 2/9]
"The Constitution of the United States has placed several
limitations upon the general power [of taxation], and . . . some of
them are implied. One of its provisions is that neither the
President of the United States (Art. II, sec. 1, par. 6) nor a
judge of the Supreme or inferior courts (Art. III, sec. 1) shall
have his salary diminished during the period for which he shall
have been elected, or during his continuance in office. It is very
clear that
Page 307 U. S. 290
when Congress, during the late [Civil] war, levied an income
tax, and placed it as well upon the salaries of the President and
the judges of the courts as those of other people, that it was a
diminution of them to just that extent."
Although the Income Tax Act of 1894 said nothing about the
compensation of the judges, Mr. Justice Field construed § 33
[
Footnote 2/10] to tax that
compensation, and assigned that ground, among others, for joining
in the decision that the Act was unconstitutional.
Pollock v.
Farmers' Loan & Trust Co., 157 U.
S. 429,
157 U. S.
604-606. Mr. Justice Field, who was confirmed the day
this Court ordered Chief Justice Taney's letter entered on its
records, had taken his place upon this bench at the beginning of
the following term. His opinion recited the facts of that incident,
and quoted extensively from the letter, which was printed as an
appendix to the volume of the reports containing the opinions in
the
Pollock case. 157 U.S. 701. The Justice ended his
discussion of the matter by stating his belief, based on
information, that the opinion of Attorney General Hoar had been
followed ever since without question by the Treasury. And, upon
reargument of the cause, Attorney General Olney said in his brief:
"There has never been a doubt since the opinion of Attorney General
Hoar that the salaries of the President and judges were
exempt."
The Revenue Acts of 1913 [
Footnote
2/11] and 1916 [
Footnote
2/12], being the first two after adoption of the Sixteenth
Amendment, expressly
Page 307 U. S. 291
excluded from gross income the compensation of judges then in
office. But, after this country engaged in the World War, the
Revenue Act of 1918, approved February 24, 1919, defined gross
income to include "in the case of the President . . . [and] the
judges of the Supreme and inferior courts . . . , the compensation
received as such." [
Footnote
2/13] The reports of the congressional committees having the
measure in charge indicate that the Congress was in doubt as to the
constitutional validity of that provision, and intended to have the
question decided by the courts. [
Footnote 2/14] The question was raised and presented
for decision in
Evans v. Gore, 253 U.
S. 245. The Collector included the salary for 1918 of
Judge Evans, appointed before enactment of the taxing statute, in
gross income. Had it been excluded, he would have had no taxable
income. He paid the tax and brought suit to recover the amount so
exacted. The United States district court for the western district
of Kentucky held him not entitled to recover. But, after argument
by eminent counsel, including the Solicitor General, this Court
held that the clause declaring that compensation of judges "shall
not be diminished during their continuance in office" prevents
diminution by taxation, and that it has been so construed in the
actual practice of the government.
For the purpose of disclosing the reasons for and true meaning
of the clause forbidding diminution of compensation of judges, the
opinion of the Court, written by Mr. Justice Van Devanter, brought
forward statements of Alexander Hamilton, Chief Justice Marshall,
Justice Story, Chancellor Kent, Chief Justice Taney, Justice Field,
Attorneys General Hoar and Olney and others.
Page 307 U. S. 292
Speaking for the Court, he said:
"With what purpose does the Constitution provide that the
compensation of the judges 'shall not be diminished during their
continuance in office'? Is it primarily to benefit the judges, or
rather to promote the public weal by giving them that independence
which makes for an impartial and courageous discharge of the
judicial function? Does the provision merely forbid direct
diminution, such as expressly reducing the compensation from a
greater to a less sum per year, and thereby leave the way open for
indirect, yet effective, diminution, such as withholding or calling
back a part as a tax on the whole? Or does it mean that the judge
shall have a sure and continuing right to the compensation whereon
he confidently may rely for his support during his continuance in
office, so that he need have no apprehension lest his situation in
this regard may be changed to his disadvantage?"
". . . The primary purpose of the prohibition against diminution
was not to benefit the judges, but, like the clause in respect of
tenure, to attract good and competent men to the bench and to
promote that independence of action and judgment which is essential
to the maintenance of the guaranties, limitations, and pervading
principles of the Constitution and to the administration of justice
without respect to persons and with equal concern for the poor and
the rich. Such being its purpose, it is to be construed not as a
private grant, but as a limitation imposed in the public interest;
in other words, not restrictively, but in accord with its spirit
and the principle on which it proceeds."
"Obviously, diminution may be effected in more ways than one.
Some may be direct, and others indirect, or even evasive, as Mr.
Hamilton suggested. But all which, by their necessary operation and
effect, withhold or take from the judge a part of that which has
been promised by
Page 307 U. S. 293
law for his services must be regarded as within the prohibition.
Nothing short of this will give full effect to its spirit and
principle. Here, the plaintiff was paid the full compensation, but
was subjected to an involuntary obligation to pay back a part, and
the obligation was promptly enforced. Of what avail to him was the
part which was paid with one hand, and then taken back with the
other? Was he not placed in practically the same situation as if it
had been withheld in the first instance? Only by subordinating
substance to mere form could it be held that his compensation was
not diminished. . . ."
"The prohibition is general, contains no excepting words, and
appears to be directed against all diminution, whether for one
purpose or another, and the reasons for its adoption, as publicly
assigned at the time and commonly accepted ever since, make with
impelling force for the conclusion that the fathers of the
Constitution intended to prohibit diminution, by taxation as well
as otherwise, that they regarded the independence of the judges as
of far greater importance than any revenue that could come from
taxing their salaries. . . ."
"When we consider . . . what is comprehended in the
congressional power to tax -- where its exertion is not directly or
impliedly interdicted -- it becomes additionally manifest that the
prohibition now under discussion was intended to embrace and
prevent diminution through the exertion of that power; for, as this
Court repeatedly has held, the power to tax carries with it 'the
power to embarrass and destroy;' may be applied to every object
within its range 'in such measure as Congress may determine;'
enables that body 'to select one calling and omit another, to tax
one class of property and to forebear to tax another;' and may be
applied in different ways to different objects so long as there is
'geographical uniformity' in the duties, imposts and excises
imposed. [Citing.] Is it not therefore morally certain that the
discerning
Page 307 U. S. 294
statesmen who framed the Constitution and were so sedulously
bent on securing the independence of the judiciary intended to
protect the compensation of the judges from assault and diminution
in the name or form of a tax? Could not the purpose of the
prohibition be wholly thwarted if this avenue of attack were left
open? Certainly there is nothing in the words of the prohibition
indicating that it is directed against one legislative power, and
not another, and, in our opinion, due regard for its spirit and
principle requires that it be taken as directed against them
all."
Mr. Justice Holmes wrote a dissenting opinion, in which Mr.
Justice Brandeis joined. With that expression, his opposition to
the decision ended. Two years later, in
Gillespie v.
Oklahoma, 257 U. S. 501,
writing for the Court, invalidating a state tax upon net income of
a lessee from sales of his share of oil and gas received under
leases of restricted Indian land, he said (p.
257 U. S.
505):
"In cases where the principal is absolutely immune from
interference, an inquiry is allowed into the sources from which net
income is derived, and, if a part of it comes from such a source,
the tax is
pro tanto void,
Pollock v. Farmers' Loan
& Trust Co., 157 U. S. 429;
158 U. S.
158 U.S. 601; a rule lately illustrated by
Evans v.
Gore. . . ."
And, in that case, he relied on the truth, as put by Chief
Justice Marshall in
M'Culloch v.
Maryland, 4 Wheat. 316,
17 U. S. 431,
that "the power to tax involves the power to destroy." He quoted
(p.
257 U. S. 505)
with approval from
Indian Oil Co. v. Oklahoma,
240 U. S. 522, the
statement of the opinion (p.
240 U. S. 530)
that "[a] tax upon the leases is a tax upon the power to make them,
and could be used to destroy the power to make them." [
Footnote 2/15]
Page 307 U. S. 295
Miles v. Graham, 268 U. S. 501,
held invalid § 213(a), Revenue Act of 1918, (condemned in
Evans
v. Gore) when applied to compensation of Judge Graham,
Page 307 U. S. 296
appointed after its enactment. Mr. Justice Holmes joined in the
decision. Mr. Justice Brandeis merely noted dissent.
In the course of the opinion, we said:
"Does the circumstance that defendant in error's appointment
came after the taxing act require a different view concerning his
right to exemption? The answer depends upon the import of the word
'compensation' in the constitutional provision."
"The words and history of the clause indicate that the purpose
was to impose upon Congress the duty definitely to declare what sum
shall be received by each judge out of the public funds and the
times for payment. When this duty has been complied with, the
amount specified becomes the compensation which is protected
against diminution during his continuance in office."
". . . The compensation fixed by law when defendant in error
assumed his official duties was $7,500 per annum, and to exact a
tax in respect of this would diminish it within the plain rule of
Evans v. Gore."
"The taxing Act became a law [February 24, 1919] prior to the
statute prescribing salaries for judges of the Court of Claims
[approved February 25, 1919], but, if the dates were reversed, it
would be impossible to construe the former as an amendment which
reduced salaries by the amount of the tax imposed. No judge is
required to pay a definite percentage of his salary, but all are
commanded to return, as a part of 'gross income,' 'the compensation
received as such' from the United States. From the 'gross income,'
various deductions and credits are allowed, as for interest paid,
contributions or gifts made, personal exemptions varying with
family relations, etc., and upon the net result assessment is made.
The plain purpose was to require all judges to return their
compensation as an item of 'gross income,' and to tax this as other
salaries. This is forbidden by the Constitution. "
Page 307 U. S. 297
"The power of Congress definitely to fix the compensation to be
received at stated intervals by judges thereafter appointed is
clear. It is equally clear, we think, that there is no power to tax
a judge of a court of the United States on account of the salary
prescribed for him by law."
In
O'Donoghue v. United States, 289 U.
S. 516, we construed the Act of June 30, 1932, [
Footnote 2/16] reducing the salaries of
all judges "except judges whose compensation may not, under the
Constitution, be diminished during their continuance in office." We
there held that the supreme court and court of appeals of the
District of Columbia were constitutional courts, and therefore that
the judges of those courts were excepted from the salary reduction.
We cited the authorities, adopted the reasoning, and reaffirmed the
conclusions on which rest the Court's judgments in
Evans v.
Gore, supra, and
Miles v. Graham, supra. And see
Booth v. United States, 291 U. S. 339.
Evidently the Court intends to destroy the decision in
Evans
v. Gore, supra. Without suggesting that there is any
distinction between that case and
Miles v. Graham, supra,
it declares that the latter "cannot survive." But the decision of
today fails to deal with, much less to detract from the reasoning
of, those cases. The opinion would imply that the letter of Chief
Justice Taney to the Secretary of the Treasury, and the separate
opinion of Mr. Justice Field in the
Pollock case, were
treated as having weight as judicial decisions. But nowhere has
that ever been suggested. However, all who are familiar with our
judicial history know that entitled to great respect are the
reasoned conclusions of these eminent American jurists as to the
true intent and meaning of the Constitution of the United States.
And similarly worthy of attention are the opinions of the Attorneys
General and other public officials following the reasoning of Chief
Justice Taney.
Page 307 U. S. 298
Now the Court cites, as if entitled to prevail against those
well sustained opinions and the deliberate judgments of this Court,
opposing views -- if, indeed, upon examination, they reasonably may
be so deemed -- of English speaking judges in foreign
countries.
It refers,
footnote 6 to the
decision of the Privy Council in
Judges v. Attorney General of
Saskatchewan, 2 D.L.R. 209, construing income tax statutes of
Saskatchewan. Neither the Dominion nor the Province has any law
forbidding diminution of compensation of judges while in office,
and that decision has nothing to do with the question before us.
The Australian and South African cases cited,
footnotes 6 and |
footnotes 6 and S. 277fn8|>8, involved construction of
income tax statutes under constitutions or charters created by
legislative enactments and subject to authoritative interpretation
or change by the local or British Parliament. They shed no light
upon the issue in this case.
The opinion claims no support from any state court decision. The
one it cites,
footnote 8 that
of the Maryland Court of Appeals in
Gordy v. Dennis, 5
A.2d 69, held that, under a clause in the Constitution of Maryland
like that in Art. III, § 1, the compensation of state judges may
not be taxed.
The opinion also cites,
footnote
7 selected gainsaying writings of professors -- some are
lawyers and some are not -- but without specification of or
reference to the reasons upon which their views rest. And, in
addition, it cites notes published in law reviews, some signed and
some not; presumably the latter were prepared by law students.
The suggestion that, as citizens, judges are not immune from
taxation begs the question here presented. The Constitution itself
puts judges in a separate class, declaring that, at stated times,
they shall receive for their services compensation which "shall not
be diminished." And so their salaries are distinguished from income
of
Page 307 U. S. 299
others. The immunity extends only to compensation for their
services. No question of comparison or reasonableness is
involved.
Admittedly the Court now repudiates its earlier decisions upon
the point here in issue. The provision defining tenure and
providing for undiminishable compensation was adopted with unusual
accord. There has been unanimity of opinion that, because in
comparison with the legislative and executive the judicial
department is weak, its independence is essential to our system of
government. These safeguards go far to insure that independence.
And, from the beginning, statesmen and jurists have agreed that the
clause forbids diminution of judges' compensation by any form of
legislation. The clause in question is plain: no exception is
expressed; none may be implied. Its unqualified command should be
given effect.
For one convinced that the judgment now given is wrong, it is
impossible to acquiesce or merely to note dissent. And so this
opinion is written to indicate the grounds of opposition and to
evidence regret that another landmark has been removed.
I am of opinion that the judgment of the district court should
be affirmed.
[
Footnote 2/1]
C. 6, 44 Stat. 919.
[
Footnote 2/2]
§ 22(a), c. 209, 47 Stat. 169.
[
Footnote 2/3]
§ 22(a), c. 277, 48 Stat. 680.
[
Footnote 2/4]
§ 22(a), c. 690, 49 Stat. 1648.
[
Footnote 2/5]
Act of August 24, 1937, § 2, c. 754, 50 Stat. 752.
[
Footnote 2/6]
The opinion is set forth in a footnote at p.
7 U. S. 160
et seq. of 3 Cranch.
[
Footnote 2/7]
C. 119, 12 Stat. 472.
[
Footnote 2/8]
Printed in 157 U.S. at 701.
[
Footnote 2/9]
Miller on the Constitution of the United States, p. 247.
[
Footnote 2/10]
§ 33, 28 Stat. 557, in terms was much like § 86 of the Act of
1862; it levied
"on all salaries of officers, or payments . . . to persons in
the service of the United States, . . . when exceeding the rate of
four thousand dollars per annum, a tax of two percentum on the
excess above the said four thousand dollars,"
and made it the duty of disbursing officers to deduct and
withhold the tax.
[
Footnote 2/11]
§ 2B, 38 Stat. 168.
[
Footnote 2/12]
§ 4, 39 Stat. 759.
[
Footnote 2/13]
§ 213(a), 40 Stat. 1065.
[
Footnote 2/14]
H.Rept. No. 767, 65th Cong., 2d sess , p. 29; Sen.Rept. No. 617,
65th Cong., 3d sess., p. 6; 56 Cong.Rec. p. 10370.
[
Footnote 2/15]
Gillespie v. Oklahoma is one of the decisions subjected
to condemnatory comment in the concurring opinion in
Graves v.
New York ex rel. O'Keefe, 306 U. S. 466. It
is there said:
"A succession of decisions [
Gillespie v. Oklahoma is
the first cited] thereby withdrew from the taxing power of the
States and Nation a very considerable range of wealth without
regard to the actual workings of our federalism, and this, too,
when the financial needs of all governments began steadily to
mount."
At another place in that concurrence, the writer stated:
"The volume of the Court's business has long since made
impossible the early healthy practice whereby the Justices gave
expression to individual opinions. But the old tradition still has
relevance when an important shift in constitutional doctrine is
announced after a reconstruction in the membership of the Court. .
. . The arguments upon which
M'Culloch v. Maryland, 4
Wheat. 316, rested . . . have been distorted by sterile refinements
unrelated to affairs. These refinements derived authority from an
unfortunate remark in the opinion in
M'Culloch v.
Maryland. Partly as a flourish of rhetoric and partly because
the intellectual fashion of the times indulged a free use of
absolutes, Chief Justice Marshall gave currency to the phrase that
'the power to tax involves the power to destroy.' . . . The web of
unreality spun from Marshall's famous dictum was brushed away by
one stroke of Mr. Justice Holmes' pen: 'The power to tax is not the
power to destroy while this Court sits.'
Panhandle Oil Co. v.
Mississippi, 277 U. S. 218,
277 U. S.
223 (dissent)."
But, in the
Gillespie case, Mr. Justice Holmes,
speaking for the Court, had definitely applied the doctrine that
the power to tax does involve the power to destroy.
In the
Panhandle case, neither the Court nor indeed
another justice dissenting was impressed by "The power to tax is
not the power to destroy while this Court sits." The statement is
vague, and may be read to imply a power that this Court never
possessed. If taken to mean that we are empowered to regulate or to
limit the exertion by Congress of its power of taxation, it justly
may be regarded as hyperbole; if taken to mean that this Court has
power to prevent imposition by Congress of taxes laid to
discourage, to destroy, or to protect, then it is in the teeth of
the law.
See, e.g., 75 U. S.
Fenno, 8 Wall. 533,
75 U. S. 548;
McCray v. United States, 195 U. S. 27,
195 U. S. 53
et seq.; Magnano Co. v. Hamilton, 292 U. S.
40,
292 U. S. 44
et seq.; Cincinnati Soap Co. v. United States,
301 U. S. 308.
[
Footnote 2/16]
§§ 106, 107, 47 Stat. 401, 402.