Tax incentives, in the form of tax credits, deductions or exemptions, can be effective legal interventions for advancing the public’s health. A tax credit is a direct reduction in tax liability. For example, a $1,000 tax credit saves a taxpayer $1,000 in taxes. By contrast, a tax deduction lowers taxable income and the exact tax savings depends on one’s tax bracket. A tax exemption allows a consumer to avoid paying the sales tax on a product. The power to tax is a tool available to all levels of government—federal, state, and local—and therefore can be utilized in a variety of inventive ways. This brief is one in a series of policy briefs that examine interesting tax incentives that seek to address critical public health challenges. Each brief will provide an overview of the targeted public health issue and survey the varying tax incentives adopted by the federal, state, and/or local governments.
This policy brief will examine tax incentives that encourage prevention of child and adult injuries that occur while traveling, during recreation, and at home.