United States v. Carlton, 512 U.S. 26, 9 (1994)

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34

UNITED STATES v. CARLTON

Opinion of the Court

the law may disturb the relied-upon expectations of individuals, but such a change would not be deemed therefore to be violative of due process.

Similarly, we do not consider respondent Carlton's lack of notice regarding the 1987 amendment to be dispositive. In Welch v. Henry, the Court upheld the retroactive imposition of a tax despite the absence of advance notice of the legislation. And in Milliken v. United States, the Court rejected a similar notice argument, declaring that a taxpayer "should be regarded as taking his chances of any increase in the tax burden which might result from carrying out the established policy of taxation." 283 U. S., at 23.

In holding the 1987 amendment unconstitutional, the Court of Appeals relied on this Court's decisions in Nichols v. Coolidge, 274 U. S. 531 (1927), Blodgett v. Holden, 275 U. S. 142 (1927), and Untermyer v. Anderson, 276 U. S. 440 (1928). Those cases were decided during an era characterized by exacting review of economic legislation under an approach that "has long since been discarded." Ferguson v. Skrupa, 372 U. S. 726, 730 (1963). To the extent that their authority survives, they do not control here. Blodgett and Untermyer, which involved the Nation's first gift tax, essentially have been limited to situations involving "the creation of a wholly new tax," and their "authority is of limited value in assessing the constitutionality of subsequent amendments that bring about certain changes in operation of the tax laws." United States v. Hemme, 476 U. S., at 568. Nichols involved a novel development in the estate tax which embraced a transfer that occurred 12 years earlier. The amendment at issue here certainly is not properly characterized as a "wholly new tax," and its period of retroactive effect is limited. Nor do the above cases stand for the proposition that retroactivity is permitted with respect to income taxes, but prohibited with respect to gift and estate taxes. In Hemme and Milliken, this Court upheld retroactive features of gift and estate taxes.

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