Which of the following is a tax incentive?

Question

taking tax payments out of an employee’s pay before he or she receives it

the use of taxation to encourage or discourage certain behaviors

a set amount that you subtract from your gross income for yourself and any dependents

a tax on imported goods

Answer 1

The correct option that describes a tax incentive is:

the use of taxation to encourage or discourage certain behaviors.

Tax incentives are typically designed to influence individuals or businesses to engage in particular activities, such as investing in renewable energy, which can lead to tax breaks or credits.