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Blog 'atlanta' » Georgia among states that award special tax credits

MICHAEL HILL

Associated Press

Do volunteer firefighters deserve a tax break? How about nurses? Or gym rats?

People in each group would be eligible for special state tax credits under bills before New York's Legislature. Such targeted tax breaks have been bestowed in recent years on diverse groups nationwide - rural doctors in Georgia, adoptive parents in California, food banks supporters in Michigan, historic barn restorers in New York.

These people benefit at tax time based not on what they earn, but on what they do. Such socially conscious tax credits have proliferated in recent years, according to experts. While lawmakers see the credits as a way of encouraging behavior beneficial to society, critics claim they are steadily mucking up the tax system.

"In the '60s and '70s, we started using the tax system for social engineering with a vengeance," said Richard Pomp, tax expert and professor at the University of Connecticut School of Law. "Now it's this do-gooder philosophy: 'Hey you're a good guy! Why don't we give you a credit?'"

Tax credits have been around for generations. Unlike tax deductions, which reduce total taxable income, credits reduce dollar for dollar actual taxes owed.

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