Over the past few years, more and more wealthy people in the Federation had begun participating in charitable activities.
After the Gefran exiled nobles arrived in the Federation, they discovered that almost every transaction required them to pay taxes. On their accountants' advice, they also began engaging in charity.
Donate one million, and one million would be deducted directly from their taxes. Sometimes, they could even deduct 1.1 million.
During special periods, or when donating to special organizations, that figure could be increased even further.
On the surface... it seemed to be largely meaningless.
Look at it this way: donate one million here and save one million there. It was simply moving money from one hand to the other. To capitalists pursuing maximum profit, it seemed completely unnecessary.
But in truth, the calculation could not be made that way.
The Federation also had a corporate income tax, which could also be called a corporate profits tax. It was calculated according to the tax rate based on a company's profits after all costs and expenses had been deducted.
It used a tiered tax-rate model: the more a company earned, the more it paid.
Put more simply, the one million donated could be counted as a business expense. When filing its taxes, the company could report one million less in profit.
At the same time, the tax deduction generated by that one million could directly mean that a company not only avoided paying corporate income tax, but also avoided paying other taxes! This was why some companies went on major property-buying sprees. As long as they lowered their profits, the taxes they had to pay would be reduced substantially.
At the same time, however, the company's market value continued to rise, because the value and appreciation of the properties it purchased were