Final answer:
Bribes are not deductible in tax law because such deductions would support illegal activities against public policy. This concept is contrary to the benefit principle of taxation and the ability-to-pay principle that govern United States tax laws, both of which promote legal and socially beneficial contributions.
Step-by-step explanation:
Bribes are not deductible in tax law primarily because allowing such deductions would be against public policy. Deductions for illegal payments such as bribes would effectively mean that the government is subsidizing unlawful activity. This stance aligns with the two underlying principles of taxation in the United States: the benefit principle of taxation and the ability-to-pay principle.
The benefit principle of taxation posits that those who benefit from taxes should pay in proportion to the amount of benefits they receive. Conversely, the ability-to-pay principle suggests that those with the capacity to bear the burden should contribute more to the tax revenues. Both principles emphasize that tax payments should be associated with legitimate and socially beneficial activities. Bribes, being neither legitimate nor beneficial to society, are inherently at odds with these taxation principles.
Deductions against public policy, including bribes, undermine the ethical standards of society and the intent of the tax system to fund lawful and beneficial public projects and services. Tax laws are crafted to support honest business practices and compliance with legal standards; thus, disallowing deductions for bribes is in line with maintaining the integrity of the fiscal system and enforcing legal norms.