That’s… a really interesting argument. I hadn’t thought about tax deductions that way before.
Perhaps “business” is the wrong term to use? They’re definitely providing financial incentives for the behaviour they want citizens to engage in.
i.e.: we want citizens to buy houses, so we provide a tax deduction for the interest on mortgages. And we want citizens to have children, so we give out extra tax exemptions for people who have dependents. I probably wouldn’t claim that the government was in the business of making babies, though. 
