A stabilized finite element formulation for incompressible viscous flows is derived. The starting point are the modified Navier-Stokes equations incorporating naturally the necessary stabilization terms via a finite increment calculus (FIC) procedure. Application of the standard finite element Galerkin method to the modified differential equations leads to a stabilized discrete system of equations overcoming the numerical instabilities emanating from the advective terms and those due to the lack of compatibility between approximate velocity and pressure fields. The FIC method also provides a natural explanation for the stabilization terms appearing in all equations for both the Navier-Stokes and the simpler Stokes equations. Transient solution schemes with enhanced stabilization properties are also proposed. Finally a procedure for computing the stabilization parameters is presented.