No single factor of income tax planning today exceeds in importance those devices under which payment of tax with respect to services performed by an employee in his peak earning years is postponed until the compensation is actually paid to him at a later date. It is normally expected that through these devices payment will be made to the employee after he has partially or fully retired and no longer encounters the high tax burden which arises from progressive rates at the time the services are rendered.
Ralph S. Rice,
The New Tax Policy on Deferred Compensation,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol59/iss3/3