Cite as: 503 U. S. 594 (1992)
Opinion of the Court
The court deemed the first four differences significant, not because in themselves they justified disparate tax treatment, but because they supported the fifth distinction—that military retirement benefits constitute reduced pay for reduced current services, rather than deferred compensation for past services. Id., at 197, 815 P. 2d, at 53. By contrast, "[s]tate and local government retirement benefits are deferred compensation," the court found, and "not current pay." Ibid. The court concluded that this principal distinction between military retirees and state and local government retirees justified their differential treatment under the State's tax laws. Accordingly, it held that a military retiree's benefits were as legally subject to state taxation as the income of active military personnel, whose pay was liable for state taxation pursuant to the United States' consent, as expressed in 4 U. S. C. § 111.
Military retirees unquestionably remain in the service and
are subject to restrictions and recall; in these respects they are different from other retirees, including the state and local government retirees whom Kansas does not tax. But these differences, standing alone, do not justify the differential tax treatment at issue in this case. Nor do these differences persuasively indicate that, for purposes of 4 U. S. C. § 111, Kansas may treat military retirement pay as reduced pay for reduced services. As a general matter, a military retiree is entitled to a stated percentage of the pay level achieved at retirement, multiplied by the years of creditable service. Brief for United States as Amicus Curiae 11, n. 16. In this respect, "retired [military] pay bears some of the features of deferred compensation. The amount of retired pay a service member receives is calculated not on the basis of the continuing duties he actually performs, but on the basis of years served on active duty and the rank obtained prior to retirement." McCarty v. McCarty, 453 U. S. 210, 223, n. 16 (1981) (citation omitted). By taking into account years
of service, the formula used to calculate retirement benefits
599
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