≡ Menu

Section 162(m)

In the public-choice seminar that I teach this semester at GMU Law, my class and I had a splendid conversation yesterday about Sec. 162(m) of the U.S. tax code.  (Most of the splendor of the conversation was supplied by my students, not be me.)

This tax-code provision was created in 1993.  It prohibits firms from deducting from their taxable incomes amounts above $1M paid to top corporate executives unless these excess amounts are compensation for meeting performance-based measures.

Want to speculate on the unintended consequences of this Clinton-administration effort to "rein in" executive salaries?!


Next post:

Previous post: