Let's say we have 1 tax rate for ease of 25%. I make $100, I give $10 to charity. I'm taxed on $90 I have $67.5 after taxes. Now Mr goldsteinberg makes $100. But buys a painting for $1. He pays an art critic friend $1 to "appraise" it's value. It's amazingly worth $100 now. He donates to local museum and pays no taxes as his charitable contributions match his income. He now has $98 still.
Let's say we have 1 tax rate for ease of 25%.
I make $100, I give $10 to charity. I'm taxed on $90 I have $67.5 after taxes.
Now Mr goldsteinberg makes $100. But buys a painting for $1. He pays an art critic friend $1 to "appraise" it's value. It's amazingly worth $100 now. He donates to local museum and pays no taxes as his charitable contributions match his income. He now has $98 still.
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