A measure for governments to stimulate the arts is through tax incentives. This chapter explores the different types of tax incentives and explains how tax incentives encourage individuals to give to the arts. Some scholars favour tax incentives over direct subsidies, whereas others argue the opposite. The arguments used are outlined, giving insight into the advantages and disadvantages of tax incentives in comparison to direct subsidies. Readers are encouraged to think critically about what an effective tax incentive should look like, in terms of its scope, the technique used and the requirements imposed on eligible donations and recipients. How can a tax incentive be formed in such a way that it is targeted to help achieve the envisioned policy aim?