Both economic and social considerations can be used to justify: Disallowance of any deduction for expenses deemed to be contrary to public policyle.g., fines, penalties, illegal kickbacks, bribes to government officials). Various tax credits, deductions, and exclusions, that are designed to encourage taxpayers to obtain additional education. Favorable tax treatment for accident and health plans provided for employees and financed by employers. Allowance of a deduction for state and local income taxes paid