the difference between the amount of economic productivity that would occur without the tax and that which occurs with the tax. For example, if savings are taxed, people save less than they otherwise would. If non-essential goods are taxed, people buy less. If wages are taxed, people work less. Finally, if activities like entertainment and travel are taxed, consumption is reduced. Sometimes, the goal is to reduce such market activity, as in the case of taxing cigarettes. However, reducing activity is most often not a goal because greater market activity is considered to be desirable. When a tax incentive is spoken of, it usually means removing all or some tax and thus reduce its burden. Pseudo-incentives Regardless of the fact that an incentive spurs economic activity, many use the term to refer to any relative change in taxation that changes economic behavior. Such pseudo-incentives include tax holidays, tax deductions, or tax abatement. Such "tax incentives" are targeted at both individuals and corporations. Individual incentives Individual tax incentives are a prominent form of incentive and include deductions, exemptions, and credits. Specific examples include the mortgage interest deduction, individual retirement account, and hybrid tax credit. Another form of an individual tax incentive is the income tax incentive. Though mostly used in transitioning and developing countries, usually correlating with insufficient domestic capita, the income tax incentive is meant to help the economic welfare of direct investors and corresponds with investing in production activities and finally, many times is meant to attract foreign investors. These incentives are introduced for various reasons. Firstly, they are seen to counterbalance investment disincentives stemming from the normal tax system. Others use the incentives to equalize disadvantages to investing such as complicated laws and insufficient infrastructure. Corporate tax incentives Corporate tax incentives can be raised at federal, state, and local government levels. For example, in the United States, the federal tax code provides a wide range of incentives for corporations, totaling $109 billion in 2011, according to a Tax Foundation Study. The Tax Foundation categorizes US federal tax incentives into four main categories, listed below: Tax exclusions for local bonds valued at $12.4 billion. Preferences aimed at advancing social policy, valued at $9 billion. Preferences that directly benefit specific industries, valued at $17.4 billion. Preferences broadly available to most corporate taxpayers, valued at $68.7 billion. Corporate tax incentives provided by state and local governments are also included in the