Among the positive benefits, if implemented and designed properly, tax incentives can attract investment to a country.
That is because almost all taxes impose what economists call an excess burden or a deadweight loss[citation needed].
[citation needed] Finally, if activities like entertainment and travel are taxed, consumption is reduced.
Specific examples include the mortgage interest deduction, individual retirement account, and hybrid tax credit.
Though mostly used in transitioning and developing countries, usually correlating with insufficient domestic capita, the income tax incentive is meant to help the economic welfare of direct investors and corresponds with investing in production activities and finally, many times is meant to attract foreign investors.
[5] Corporate tax incentives can be raised at federal, state, and local government levels.
[8] Site selection consultants[9] negotiate these incentives, which are typically specific to the corporate project the state is recruiting, rather than applicable to a broader industry.
Examples include the following:[10] In Armenia, corporate income tax incentive is available for Armenian resident entities that meet several criteria under the government's export promotion-oriented program.
The second incentive is a tax credit of 10% for rehabilitation of structures built before 1936 but are considered non-residential and non-historical.