It’s not abnormal.

III. Federal Tax Incentives Play an Important Role in Sustainability Efforts

Tax policy often includes consideration of the following principles: simplicity, transparency, certainty, convenience of payment, equity (fairness), and neutrality. 90 The principle of neutrality means that the effect of the tax law should have minimal effect on taxpayer behavior, 91 for the primary purpose of taxation is to raise revenue to pay for governmental services and functions. 92 In reality, tax laws are often designed to influence taxpayer behavior. 93

Behavioral changes, whether those of an individual or a corporation, can generally be accomplished either through regulation or incentives. 94 Tax has proven to be quite an effective tool in this regard. 95 The most [*18] popular means of incentivizing behavior via taxes include offering tax credits that provide taxpayers with a dollar-for-dollar offset against their tax liability and providing deductions that are used to reduce taxable income. 96 Of course, such efforts are not without costs and, indeed, for "every tax incentive, there is a corresponding cost resulting from the foregone tax revenue. However, unless obtained through lobbying, the cost is borne because of the value placed on the incentivized behavior." 97

Over the years, the U.S. Congress has used the tax code as a way of influencing the behavior of individuals and entities to advance the U.S. economy. 98 For example, to encourage individuals to provide for family members and others after death, the Internal Revenue Code provides an exclusion from gross income amounts received from life insurance proceeds. 99 In a similar manner, the U.S. Congress uses the tax code as a vehicle for advancing its environmental goals, 100 relying heavily on tax incentives and, to a lesser extent, tax penalties as instruments to achieve its environmental aspirations. 101 Tax incentives (alternatively referred to as tax expenditures) provide Congress with a way to promote government policy goals 102 and encourage the private sector to contribute to the achievement of those goals by subsidizing private sector expenditures. 103 Tax incentives generally take the form of tax deductions, exclusions, and credits. 104 Although tax incentives result in a loss of tax revenues, they allow the U.S. government to achieve policy goals without the need to incur direct costs. 105