In the United States v. Jerry W. Carlton case of 1993, the Supreme Court ruled on a tax law issue involving retroactive legislation. The court upheld Congress's right to enact laws that have a retroactive effect in taxation matters, provided they are not "arbitrary and irrational". In this case, Carlton had taken advantage of an estate tax deduction after his cousin's death in 1987 but before he was appointed as executor of the estate. However, Congress amended the law later that year to require that such deductions could only be claimed by executors who were also beneficiaries under wills or trusts - which did not apply to Carlton since he was merely an executor and not a beneficiary too. When applied retrospectively, this amendment meant Carlton owed additional taxes for 1987 which led him to challenge its constitutionality due to its retroactivity aspect; however, his argument was rejected by both lower courts and eventually by Supreme Court too.

In the dissenting opinion for United States v. Jerry W. Carlton, it was argued that the retroactive application of a tax law amendment violated due process rights under the Fifth Amendment. The dissenting justices believed that this case represented an unconstitutional departure from established precedent regarding retroactivity in tax law changes, which traditionally only applied to corrections of legislative mistakes or misinterpretations and not substantive changes in policy as seen here. They contended that Carlton had no way of knowing his actions would later be deemed illegal when he made them, thus making it unfair to penalize him after-the-fact based on new legislation. This view held that such retrospective laws disrupt reasonable expectations and settled transactions, thereby undermining public trust in legal systems.