What effect do tax incentives have on economic development? A. Tax incentives have no impact on economic development. B. Tax incentives only allow the rich to get richer and the poor to get poorer. C. Tax incentives encourage international trade of human or physical resources. D. Tax incentives only affect economic development when a nation creates an important technology

Tax incentives are written into a country's tax code and are designed to encourage a particular economic activity. They can either lessen or remove the burden of the tax from whatever market transaction is taking place. The government can control the market place by offering tax incentives on certain products, lifestyles, or ideals in order to boost the economy in that sector. Take for example a savings account: the less taxes you have to pay on a savings account, the more money people are willing to save. If the taxation on a savings account is much higher, people are less inclined to save money.