thank you for morning that please the court this is not a case in which there was a mistake made in the drafting of the language that was signed by congress adopting the covenant subject to later proceeding this is a case in which that document embodied what the deal was at that time and to understand why no mistake was made you have to have an understanding of the context of the deal what i called the deal was an agreement between the two more room carolinian people who were the indigenous citizens of the northern mariana islands and the united states and in the context of that deal with the time of the deal the carolinian and more people would become citizens of the trust territory of the pacific islands alone or with citizens all of whom are aliens to the united states oath the islands of of application of fica taxes to any employee it's when the dumbest illyria's and citizens of the northern mariana islands become employed the good citizens of the united states those fica taxes will apply to thirty one twenty one eight and beat of their own effect because they are citizens of the united states and so it applies to them whenever they are working for an american employer and i read six o six speed to say with reference to the employer tax as as i'm sure the court is well aware in the armstrong decision to apply only to income taxes and only to direct the my legislature to adopt as its local territorial income tax code of the i and in the armstrong the code interpreted six zero one c and counsel very strongly that one cannot use these same as glaum clauses or substitution for it is to apply the broad range of federal laws to the s signed off at a time when there was a substantial amount of uncertainty as to whether congress would ultimately alack the form of the relationship to be a major part of that negotiation involve giving the citizens a step up and and credit for their contributions to the trust territory retirement fund and there was concern at that time through the negotiations up to writing the covenant about whether or not the employee tax would apply and if so how much and would it be brought in step by step because relative to the wage levels out there it was a significant bird i think a very tricky compound in understanding in this context is to watch the change from a draft five december one thousand and seventy four to the agreement that congress actually set out to be voted on by the people of the northern mariana islands draft five says title two benefits and the fica taxes will apply that draft was never submitted to the people of the northern mariana islands for the referendum instead it was changed after that draft was referenced to congress and what comes back is very different it expressively excludes by changing six zero six c well of the trust territory people they were included before if you were in the truck or  marshall islands it's under draft five if that were adopted you could relocate to the sea in a minute and you would then get these stepped up benefits congress didn't want that this was a deal that was to benefit the local indigenous people who were going to become citizens of the united states so when they went from the draft five to the final draft that was actually submitted for a vote they excluded everybody but domicile areas of the northern mariana islands who were previously in the trust territory retirement fund they dropped expressly any reference or language that included the employee tax it was a hot button item congress as you can see from the legislative history had not determined how it was going to apply these was the group that was appointed by the trust territory government to be the negotiating representative for the tomorrow in carolinian peoples it speaks for them and i submit to you that when he talks about the people of the northern mar it's talking about those citizens and on the sillier the discretion of six zero six you see that there is a substantial concern for the impact that that will have it's referenced in the senate report i believe it's in pages sides there is in the senate report a direct reference to the fact that the marianas political commission has told them that we have to continue looking at this because the taxes are too burdensome relative to the wage levels and so that that was one of the concerns and so when you see this change the specific direct change from the draft to what was actually submitted to the people the northern marianas subject to the proviso that everyone  congress had full authority under the covenant under section one of five to later decide whatever it is it wanted to do i submit in the can't find that the decision not to refer in this context to the employee tax anything but deliberate getting back to your earlier question judge cross as to what our position is with respect to the employees it didn't need to be mentioned there because as restricted to the citizens who would become citizens of the united states upon bad effect of the date of the strike that employment tax were applied to them through thirty one twenty one a or b and if they were working for an american employer which is how we interpret that the taxpayers argue that they're not required to pay the employee portion of fica taxes and that to me this creates too broad mysteries that with the court's indulgence i'd like to discuss briefly because i think it actually can cut through a lot of the legislative and statutory fickett that goes on here the first mystery is why is the corporate plaintiff a plaintive we've never gotten an answer it is this is corp who has employer who  explicitly covered under section sixty six b of a covenant and yet they're seeking one point four million dollars in a refund we discussed this mystery a little bit in our answering brief i don't think they addressed it at all in their reply brief and it's never been clear to us why this is in controversy at all if there's anything in controversy it's only the employee portion and we don't see how that has anything to do with the corporate plaintiffs so that's that's one mystery but the second one really gets to the heart of why that taxpayers have been arguing about this is where i think i can cut through some of what's been going on here in a pretty straightforward way the mystery here is what are we to make of this apparent exclusion of a word that one would otherwise expect to be there that is in section six zero six b it's not the case that they said that employer taxes and self employed taxes will apply in soft and plenty taxes will not apply that would have the employee it right agree that's why i think there's it's but but nonetheless it's something that had not ever been done before if they're right this is a distinction that congress has never made before in history of social security so the question would be why and they have some answers but i have a modest proposal if you will about why just looking at the texas six zero six b that may not have been their intent at all and congress may actually have thought  covering employee taxes and we may be arguing a lot about nothing but the reason why is a little bit on legislative history and realize it's a strange thing to say but you'll see why the legislative history is uniform  just finished talking about likewise the section by section analysis that would be very honest political status commission conducted which parent i think we're the ninth circuit's held to be authoritative in this context how exactly the same language that's where congress got the language it said the laws that support social security taxes will apply so one would have thought that the laws will apply all of the laws such as this is the employee portion is a major portion of the support then of course we have the mysterious language ratified and the time it would take effect about ten years later to figure out are we going to mess anything up just by enacting the covenant as it is because it's a complicated thing and integrating a sort territory like this and they took a couple of years they issued two made subject to taxes imposed by the federal insurance contributions act to support the federal social security system and opposing counsel denigrates this is kind of a straight remark but this commission's sole role was to go through this covenant with a fine tooth knew i would and will defend that view in a second but your question is actually getting exactly to the heart of who i was going because in the view of legislative history that i was about to propose is that legislative history suggests that in fact interim report which is on page one seventy nine of the appendix i this is the summary we're talking about what should be changed what shouldn't there's a section called employment taxes and then it says on the best option employers and employees are made subject as the language i just read and we got to thinking in preparing for the argument well what is actually the meaning of excise tax because six zero six b doesn't say that employer shall pay it says that excise taxes shall be levied in essence and so to meet the language of excise meaning the engaging in occupation could very easily encompass both sides of the occupation as the employer and the employee going together to have an occupational situation and growth question there are no no i'm going to get there next about the absurdity point but the absurdity point might not even need to be reached under if we view the world excise a simply meeting the if we understood excise to speak broadly and then it would make sense of why in the legislative history congress and this commission appointed always thought that this tax applied if there is simply magic in a broad sense and i don't have any debate on the subject of point zero but i would suggest that the barrie lack of debate on the subject shows why they weren't doing anything controversial here or and the non controversial thing is to have a system as the government proposes that is the same as it is everywhere else ambiguous then we have to look to how did congress think about this problem i mean if you think it's explicit if you think that employees are explicitly excluded then we lose that and still w approached the mariana islands situation in a broad sense and it had language in there about investor something that clearly suggests the contrary we're going to be following the example of wommen in this treaty and that you need a clear statement of congress intending to do something that i hadn't done before and that's not present now i'm sorry it's taken me so long to get your question your honor about you in a bit absurd outcome  tax treaties and many sorts of nonimmigrant aliens don't pay fica taxes precisely because of these treaties now the plaintiffs in this case the tax payers are not from countries that have those treaties and that's important because what the total treaty says is that if we had one with korea that would mean that korean citizens wrecking the united states wouldn't pay taxes into our system america i don't know the answer it may depend on the treaty i don't know the answer but it would it would equate them and say that likewise if they're american citizens and create you wouldn't pay social security taxes there either what they're proposing that we've done won't charge your citizen a social security taxes even though you've made no reciprocal agreement for our citizens that's a strange result i don't know of any other time when the united states has done such a thing and so that also explains an answer to their frequent laments about how this is unfair to the citizen these aliens who don't make much money the answer to that is if it's unfair to their citizens they should negotiate with the united states government a system a total ization agreement that says that if you will release our citizens from this obligation will receive worse it may seem unfair not to have that sort of agreement but that's the problem of foreign policy not the plane on its face planes statutory language that's that's a question that this report has suggested to us should not be a step that should not lightly be taking if at all there are folks out there that would say more clearly one way or the other they could have said this is what we mean by excise taxes they could have said that we are not imposing employee taxes but i think the ultimate question and this is a question that hasn't arisen in twenty years and under this  was intentional in the way that the taxpayer suggest that it is best true in light of the lack of an express statement with respect to employees that's true in light of the potentially broad definition of the word excis it's true in light of the legislative history before during and after the enactment of this covenant there's just nothing to suggest any of the concerns that taxpayers of us have raised and none of that appears in the legislative history  thank the government's come in and has asserted a totally new position with respect to excise taxes there's nothing we in the record and there's nothing in any legal authority that we have seen where anyone refers to the employee tax on wages as an excise tax the employer tax that is paid for to support the social security problems is routinely referred to as the excise tax and the only excise tax in this context there's nothing to and thirty one twenty one it is that and that's the basis just as the fact that they these same nonintegrated workers who work lawfully admitted into the sea in a mine only for work purposes are not subject to the to the private employee eleven and thirty one twenty one her mission as an employer who is operating outside the united states even if considered interpreted six o six b to make them an american employer does not pay fica tax on foreign or non immigrant labor the the commonwealth of the northern marianas is not will be in the united states for that purpose congress has this argument has nothing to do with whether the word  code he doesn't even hundred doesn't have to pay taxes on non immigrant labor because he is operator it is operating outside the united states and is not an american employee their legislative history that they want to refer to you have only to be ambiguous senate reports where they make very clear that with respect to section six zero six and the income tax the her realm of what congress is ultimately going to decide my light is blinking so i try to stop and second that congress is going to sort that out later congress did sort that out later it sorted it out directly in public law ninety eight to thirteen where it addressed pacifically what are we going to do with we accelerate the date for making social security benefits available to the citizens of the mariana islands who will become citizens of the united states and congress on its own apart from the commission added what is now public law section one thousand b which makes very clear in the context of that statute that they are excluding non immigrant aliens in the n m i from both benefits and burden is under the laws that were subject of that commission request which includes title to social security benefits so every where that congress went in the ten years after the adoption of the covenant and prior to its effect to date everything of the congress did was consistent with same these people are not part of this program and they are not part of the system on their side benefit or bird and the absurd of the lower court relied upon was the incorrect assumption that these people zahn and that the employers that employed them are getting benefits under that program they are not they are pointed out in my response to judge krause questions those citizens once they become citizens of the united states are picked up under thirty one twenty one and that's right they are covered and that issue