Government policies, encouraging corporations

Federal corporate income tax policy comprises laws and regulations that define income subject to taxation, adjustments to taxable income (deductions), tax rates, and adjustments to tax payments (tax credits and minimum tax payments). Tax code provisions are not just intended to raise revenue they are also structured to provide taxpayers with incentives to spend or invest in desirable ways. Most of these incentives are either deductions from taxable income or credits against tax liability. For example, the tax code contains tax credits to encourage firms to perform more R D and to make the United States competitive with other nations as a place to locate business. Similar tax deductions exist for some R D expenses not eligible for these tax credits. Because each of these provisions reduces the taxes that the Federal Government collects from firms, they are sometimes referred to as tax expenditures (241). While any taxpayer theoretically could take advantage of any of these incentives, in reality many provisions have requirements that preclude their use except by certain types of taxpayers. This review focuses on components of the tax code that either directly affect industrial... 

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