While you make a good point, the year-to-year feature of some of these tax breaks also counteracts their effectiveness. For instance, the research credit is supposed to encourage more research. However, many reserach projects are long term. Companies are hesitant to rely on the credit as an incentive to research when they do not know if it will be around. Furthermore, many times credits are extended in December of the tax year. In such a scenario, the activities giving rise to the credit have already happened, and it is thus impossible for the tax break to provide an incentive ex post facto.