7. INTERNAL REVENUE 2-SALARY OF FEDERAL JUDGES NOT RENDERED TAXABLE BY INCOME TAX AMENDMENT. Const. Amend. 16, authorizing Congress to (Argued March 5, 1920. Decided June 1, collect taxes on incomes, from whatever source 3. JUDGES derived, without apportionment, among the states, does not extend the taxing power to new or excepted subjects, but merely removes all occasion otherwise existing for an apportionment, and hence does not authorize a tax on the salary of a federal judge, contrary to article 3, § 1. 8. INTERNAL REVENUE 7-FEDERAL JUDGES SUBJECT TO INCOME TAX ASIDE FROM SALARY. Apart from his salary, a federal judge is taxable on his income or property the same as any other person. Mr. Justice Holmes and Mr. Justice Brandeis dissenting. In Error to the District Court of the United States for the Western District of Kentucky. Action by Walter Evans against J. Rogers Gore, Acting Collector, etc. Judgment for defendant (262 Fed. 550), and plaintiff brings error. Reversed. *246 *Messrs. William Marshall Bullitt and Edmund F. Trabue, both of Louisville, Ky., for 22(7)—DIMINUTION OF SALARY plaintiff in error. PROHIBITED BY CONSTITUTION. Const. art. 3, § 1, providing that the compensation of judges shall not be diminished during their continuance in office, prohibits anything, the necessary operation and effect of which is to withhold or take from the judge a part of that which has been promised by law for his services. 4. JUDGES 22(7) — INCOME OF FEDERAL JUDGE FROM SALARY NOT TAXABLE. Act Feb. 24, 1919, § 213 (Comp. St. Ann. Supp. 1919, § 6336% ff), so far as it imposes a tax on the income of judges of the courts of the United States, including their salaries, violates Const. art. 3, § 1, providing that the compensation of judges shall not be diminished during their continuance in office, and the fact that the income of other persons is likewise taxed does not validate the tax. 5. CONSTITUTIONAL LAW BE 18-EFFECT MUST CONSTITUTION AND GIVEN ΤΟ BOTH AMENDMENTS, IF POSSIBLE. Unless there is some real conflict between Const. art. 3, § 1, providing that the compensation of judges shall not be diminished during their continuance in office, and Amendment 16, relative to the taxation of income, effect must be given to both. Mr. Assistant Attorney General Frierson, for defendant in error. Mr. Justice VAN DEVANTER delivered the opinion of the Court. This is an action to recover money paid under protest as a tax alleged to be forbidden by the Constitution. The plaintiff is the United States District Judge for the Western District of Kentucky, and holds that office under an appointment by the President made in 1899 with the advice and consent of the Senate. The tax which he calls in question was levied under the act of February 24, 1919, c. 18, 40 Stat. 1062, on his net income for the year 1918, as computed under that act. His compensation or salary as District Judge was included in the computation. Had it been excluded he would not have called on to pay any income The inclusion was in tax for that year. obedience to a provision in section 213 (Comp. St. Ann. Supp. 1919, § 6336%ff), requiring the computation to embrace all gains, profits, income and the like, “including in the case of the President of the United States, the judges of the Supreme and inferior courts of the United States [and the compensation received as such." Whether he could be subjected 6. CONSTITUTIONAL LAW 18-INTENT OF Others] AMENDMENT TO DEPART FROM VITAL CONSTI- It is not lightly to be assumed that, in adopting the Sixteenth Amendment, there was any purpose to depart from or imperil a constitutional principle so widely extended and so vital to the system of government as the independence of the judiciary. *247 to such a tax in *respect of his salary, consistently with the Constitution, is the matter in issue. If it be resolved against the tax he will be entitled to recover what he paid; It did fail otherwise his action must fail. in the District Court. 262 Fed. 550. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes (40 Sup.Ct.) The Constitution establishes three great With what purpose does the Constitution co-ordinate departments of the national provide that the compensation of the judges government-the legislative, the executive, "shall not be diminished during their conand the judicial-and distributes among tinuance in office"? Is it primarily to benethem the powers confided to that government by the people. Each department is dealt with in a separate article, the legislative in the first, the executive in the second and the judicial in the third. Our present concern is chiefly with the third article. It defines the judicial power, vests it in one Supreme Court and such inferior courts as Congress may from time to time ordain and establish, and declares: "The judges, both of the Supreme and inferior courts, shall hold their offices during good behavior, and shall, at stated times, receive for their services, a compensation, which shall not be diminished during their continuance in office." *249 fit 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 plaintiff insists that the provision in section 213 which subjects him to a tax in The Constitution was framed on the fundrespect of his compensation as a judge by its amental theory that a larger measure of libnecessary operation and effect diminishes erty and justice would be assured by vestthat compensation and therefore is repug-ing the three great powers, the legislative, nant to the constitutional limitation just the executive, and the judicial, in separate quoted. departments, each relatively independent of [1] Stated in its broadest aspect, the con- the others; and it was recognized that withtention involves the power to tax the com-out this independence-if it was not made pensation of federal judges in general, and both real and enduring-the separation also the salary of the President, as to which would fail of its purpose. All agreed that the Constitution (article 2, § 1, cl. 6) con- restraints and checks must be imposed to tains a similar limitation. Because of the secure the requisite measure of independindividual relation of the members of this ence; for otherwise the legislative departcourt to the question, thus broadly stated, ment, inherently the strongest, might enwe cannot but regret that its solution falls croach on or even come to dominate the othto us; and this although each member has ers, and the judicial, naturally the weakest, been paying the tax in respect of his salary might be dwarfed or swayed by the other voluntarily and in regular course. But ju- two, especially by the legislative. risdiction of the present case cannot be declined or renounced. The plaintiff was en *248 titled by law to invoke our decision on the See House Report, No. 767, p. 29, 65th Cong., 2d Sess.; Senate Report, No. 617, p. 6, 65th Cong. 3d Sess. And see Cong. Record vol. 56, p. 10370, where the Chairman of the House Committee, in asking the adoption of the provision, said: "I wish to say, Mr. Chairman, that while there is considerable doubt as to the constitutionality of taxing The particular need for making the judiciary independent was elaborately pointed out by Alexander Hamilton in the Federal ist, No. 78, from which we excerpt the following: "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. federal judges' or the President's salaries, $250 This simple view of the matter suggests several important consequences. It 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." At a later period John Marshall, whose rich experience as lawyer, legislator, and Chief Justice enabled him to speak as no one else could, tersely said (Debates Va. Conv. 1829-1831, pp. 616, 619): “Advert, sir, to the duties of a judge. He has to pass between the government and the man whom that government is prosecuting; between the most powerful individual in the community, and the poorest and most unpopular. It is of the last importance, that in the exercise of these duties he should observe the utmost fairness. Need I press the necessity of this? Does not every man feel that his own personal security and the security of his property depends on that fairness? The judicial department comes home in its effects to every man's fireside: it passes on his property, his reputation, his life, his all. Is it not to the last degree important that he should be rendered perfectly and completely independent, with nothing to influence or control him but God and his conscience? * I have always thought, from my earliest youth till now, that *251 * It is trolled. Other constitutional systems lack com- *252 establish its power upon lines which all *can comprehend and heed. The constitutional powers of the courts constitute the ultimate safeguard alike of individual privilege and of governmental prerogative. It is in this sense that our judiciary is the balance wheel of our entire system; it is meant to maintain that nice adjustment between individual rights and governmental powers which constitutes political liberty." Constitutional Government in the United States, pp. 17, 142. Conscious of the nature and scope of the power being vested in the national courts, recognizing that they would be charged with responsibilites more delicate and important than any ever before confided to judicial tribunals, and appreciating that they were to be, in the words of George Washington,2 "the keystone of our political fabric," the convention with unusual accord incorporated in the Constitution the provision that the judges "shall hold their offices during good behavior and shall at stated times receive for their services a compensation which shall not be diminished during their continthat the two things thus coupled in placeuance in office." Can there be any doubt the clause in respect of tenure during good More recently the need for this independ- behavior and that in respect of an undiminence was illustrated by Mr. Wilson, now the ishable compensation-were equally coupled President, in the following admirable state-in purpose? And is it not plain that their purpose was to invest the judges with an in"It is also necessary that there should be a dependence in keeping with the delicacy and judiciary endowed with substantial and inde- importance of their task and with the impendent powers and secure against all corrupt- perative need for its impartial and fearless ing or perverting influences; secure, also, against the arbitrary authority of the adminis-performance? Mr. Hamilton said in explatrative heads of the government. nation and support of the provision (Federalist, No. 79): the greatest scourge an angry Heaven ever inflicted upon an ungrateful and a sinning people was an ignorant, a corrupt, or a dependent judiciary." ment: "Indeed there is a sense in which it may be said that the whole efficacy and reality of constitutional government resides in its courts. Our definition of liberty is that it is the best practicable adjustment between the powers of the government and the privileges of the individual." "Our courts are the balance wheel of our whole constitutional system; and ours is the only constitutional system so balanced and con (40 Sup.Ct.) have seen cause to lament the want of precise [ was the part which was paid with one hand #253 and explicit precautions in the state constitu- and then taken back with the other? Was tions on this head. Some of these indeed have he not placed in practically the same situation as if it had been withheld in the first indeclared that permanent salaries should be established for the judges; but the experiment stance? Only by subordinating substance to has in some instances shown that such expres- mere form could it be held that his compensions are not sufficiently definite to preclude sation was not diminished. Of course, the legislative evasions. Something still more posi- conclusion that it was diminished is the nattive and unequivocal has been evinced to be req-ural one. This is illustrated in Dobbins v. uisite. * * This provision for the support Commissioners of Erie County, 16 Pet. 435, 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." 450, 10 L. Ed. 1022, which involved a tax charged under a law of Pennsylvania against a revenue officer of the United States who was a citizen and resident of that state. The tax was adjusted or proportioned to his compensation, and the state court sustained it. Erie County Com'rs v. Dobbins, 7 Watts (Pa.) 513. In reversing that decision, this tution have adopted and reiterated this court, after showing that the compensation view, Judge Story adding: The several commentators on the Consti "Without this provision [as to an undiminishable compensation], the other, as to the tenure of office, would have been utterly nugatory, and indeed a mere mockery" and Chancellor Kent observing: "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." had been fixed by a law of Congress said: "Does not a tax, then, by a state upon the the law of the United States, which secures it office, diminisuing the recompense, conflict with to the officer in its entireness? It certainly has such an effect; and any law of a state imposing such a tax cannot be constitutional." But it is urged that what the plaintiff was made to pay back was an income tax, and that a like tax was exacted or others engaged in private employment. If the tax in respect of his compensation *255 be prohibited, *it can find no justification in the taxation of other income as to which there is no prohibition; for, of course, doing what the Constitution permits gives no license to do what it prohibits. The prohibition is general, contains no excepting words, and appears to be directed against all diminution, whether for one pur [2] These considerations make it very plain, as we think, that 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 administra-pose or another; and the reasons for its adoption 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 tion, 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 words, not restrictively, but in accord with as of far greater importance than any revits spirit and the principle on which it pro-enue that could come from taxing their salceeds. *254 [3, 4] 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 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 2 Story, 1628; 1 Kent's Com. 294; 1 Wilson's Works, 410, 411; 2 Tucker, § 364; Miller, 340-343; 1 Carson's Supreme Court, 6. aries. In True, the taxing power is comprehensive and acknowledges few exceptions. But that there are exceptions, besides the one we here recognize and sustain, is well settled. Collector v. Day, 11 Wall. 113, 20 L. Ed. 122, it was held that Congress could not impose an income tax in respect of the salary of a judge of a state court; in Pollock v. Farmers' Loan & Trust Co., 157 U. S. 429, 585, 601, 652, 653, 15 Sup. Ct. 673, 39 L. Ed. 759, it was held-the full court agreeing on this pointthat Congress was without power to impose such a tax in respect of interest received from bonds issued by a state or any of its counties or municipalities; and in United States v. Railroad Co., 17 Wall. 322, 21 L. Ed. 597, there was a like holding as to municipal *257 revenues derived by the city of Baltimore from its ownership of stock in a railroad com- 14 *La. Ann. 197; 48 N. C. Appendix; N. C. pany. None of those decisions was put on Public Documents 1899, Doc. No. 8, p. 95; any express prohibition in the Constitution, In re Taxation of Salaries of Judges, 131 N. for there is none; but all recognize and gave effect to a prohibition implied from the independence of the states within their own spheres. When we consider, as was done in those cases, 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 *256 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 forbear 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. McCulloch v. Maryland, 4 Wheat. 316, 431, 4 L. Ed. 579; Pacific Insurance Co. v. Soule, 7 Wall. 433, 443, 19 L. Ed. 95; Austin v. The Aldermen, 7 Wall. 694, 699, 19 L. Ed. 224; Veazie Bank v. Fenno, 8 Wall. 533, 541, 548, 19 L. Ed. 482; Knowlton v. Moore, 178 U. S. 41, 92, 106, 20 Sup. Ct. 747, 44 L. Ed. 969; Treat v. White, 181 U. S. 264, 268, 269, 21 Sup. Ct. 611, 45 L. Ed. 853; McCray C. 692, 42 S. E. 970; Purnell v. Page, 133 N. C. 125, 45 S. E. 534; and has strong sanction in the actual practice of the government, to which we now advert. No attempt was made to tax the compensation of federal judges prior to 1862. A statute of that year, chapter 119, § 86, 12 Stat. 472, with its amendments, subjected the salaries of all civil officers of the United States to an income tax of 3 per cent. and was construed by the revenue officers as including the compensation of the President and the judges. Chief Justice Taney, the head of the judiciary, wrote to the Secretary of the Treasury a letter of protest (157 U. S. 701), based on the prohibition we are considering, and in the course of the letter said: "The act in question, as you interpret it, diminishes the compensation of every judge three per cent. 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 expresstheir powers of legislation. ly withheld from Congress, and excepted from "Language could not be more plain than that *258 ical excitement warp their judgments. v. United States, 195 U. S. 27, 61, 24 Sup. Ct. 769, 49 L. Ed. 78, 1 Ann. Cas. 561; Flint v. Stone Tracy Co., 220 U. S. 107, 158, 31 Sup. used in the Constitution. It is moreover one Ct. 342, 55 L. Ed. 389, Ann. Cas. 1912B, 1312; of its most important and essential provisions. Billings v. United States, 232 U. S. 261, 282, For the articles which limit the powers of the 34 Sup. Ct. 421, 58 L. Ed. 596; Brushaber v. legislative and executive branches of the gov Union Pacific R. R. Co., 240 U. S. 1, 24-26, 36 for the protection of the citizen in his person ernment, and those which provide safeguards Sup. Ct. 236, 60 L. Ed. 493, Ann. Cas. 1917B, and property, would be of little value without 713, L. R. A. 1917D, 414. Is it not therefore a judiciary to uphold and maintain them, which morally certain that the discerning statesmen was free from every influence, direct or indiwho framed the Constitution and were so sed-rect, that might by possibility in times of politulously 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 The collection of the tax proceeded, and, open? Certainly there is nothing in the words at the suggestion of the Chief Justice, this of the prohibition indicating that it is direct- court ordered his protest spread on its reeed against one legislative power and not an-ords. In 1869 the Secretary of the Treasury other; and in our opinion due regard for its spirit and principle requires that it be taken as directed against them all. This view finds support in rulings in Pennsylvania, Louisiana, and North Carolina, made under like constitutional restrictions, Commonwealth ex rel. v. Mann. 5 Watts & S. (Pa.) 403, 415, et seq.; New Orleans v. Lea, The tax condemned was levied under a provision, in a general revenue law, charging a tax of 2 per cent. "upon all salaries and emoluments of office, "Upon these grounds I regard an act of Congress retaining in the Treasury a portion of the compensation of the judges, as unconstitutional and void." referred the question to the Attorney General (Judge Hoar), and that officer rendered an opinion in substantial accord with Chief Justice Taney's protest, and also advised that the tax on the President's compensation was likecreated or held by or under the Constitution or laws of this commonwealth, and by or under any incorporation, institution or company incorporated by the said commonwealth, where such salaries or emoluments exceed two hundred dollars." Act No. 232, § 2, Penn. Laws 1840, p. 613; Act No. 117, § 9. Penn. Laws 1841, p. 310. |