Abstract
Tax incentives are another mechanism that government uses to stimulate private sector R&D investment. Like any policy tool, tax incentives have advantages and disadvantages. Advantages include the following (Bozeman and Link 1984):
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Tax incentives entail less interference in the marketplace than do other mechanisms, thus affording private-sector recipients the ability to retain autonomy regarding the use of the incentives.
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Tax incentives require less paperwork than other programs.
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Tax incentives obviate the need to directly target individual firms in need of assistance.
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Tax incentives have the psychological advantage of achieving a favorable industry reaction.
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Tax incentives may be permanent and thus do not require annual budget review.
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Tax incentives have a high degree of political feasibility.
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© 2002 Springer Science+Business Media New York
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Feldman, M.P., Link, A.N., Siegel, D.S. (2002). Tax Incentives. In: The Economics of Science and Technology. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-0981-3_8
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DOI: https://doi.org/10.1007/978-1-4615-0981-3_8
Publisher Name: Springer, Boston, MA
Print ISBN: 978-1-4613-5335-5
Online ISBN: 978-1-4615-0981-3
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