That's just the apparently-not-so-well-known First Law of Tax: It is always better to have more money than less money.
For little people like you and me, taking rent is a simple income and forgoing it would be a simple loss. As you say, it wouldn't make any difference for our net taxes.
When you own thousands of square meters of [what will be] prime brownfield development space, leaving it unoccupied just hastens the local government to offer incentives for redevelopment. Tax, rates, planning, VAT. Even if they don't subscribe to broken window theory, an unoccupied building pays them no business rates or council tax (UK) so doing anything else is preferable to doing nothing. They'll bend over backwards to make that happen.
A job-seeker may pass on an offer that he considers too low (because he's confident he will find something better later), no one would say he's doing so to avoid paying income taxes.
The overall portfolio cash flows profit, and capitalization is sufficient to ride out 10-20 year cycle minima on the minority of the portfolio sitting vacant until asset appreciation works in their favor again. These holdings are so large they overwhelm lay people's sense of what is feasible. This model only breaks down in "perfect storm" secular changes set within a dysfunctional government context like Detroit, and only then do you see true abandonment and not just vacancy.
To these holders, how these vacancies work is a feature, not a bug.
https://thetyee.ca/Solutions/2018/06/04/Tax-To-Solve-Housing...
This doesn't mean I want to toss out all economics, but some discerning skepticism about the descriptive (not to speak of predictive or prescriptive) modeling power of economics is in order, certainly at macro scales.
What to do about all this? I think a start was expressed by Iain A Banks in his The Culture storytelling universe, where he said "Money is a sign of poverty." My take on that is all capitalists should be striving to achieve a world where money is a historical artifact, because money is only used as a tool to advance science sufficiently to unlock post-scarcity material and cognitive abundance. In other words, capitalists should be working to progressively put themselves out of a job as capitalists, driving down the cost of every material good to the point it is cheaper to subsume it as a general utility everyone pays for than to leave it outside the Cosean boundary.
In practical, actionable terms today, I suspect this means forming inter-generational and intra-generational cooperatives as a defensive measure by the under-capitalized against predations (sometimes not even conscious or intentional) by the well-capitalized. That's a tough problem to solve.
If you have 100 shops, and rent 11 at $10k a month, and the rest are empty, you get $110k a month
If you have 100 shops, and rent 60 at $2k a month, and 40 are empty, you get $120k a month
Now lets assume a 50% tax
In the first example you keep $55k In the second example you keep $60k
Great, go for the second.
But now if you make the empty shops a tax writeoff, you instead
first example, $110k income, $850k loss. No tax to pay, total income $110k with no tax (and a £750k loss to offset other income) second example, $120k income, $80k loss. Tax to pay on $40k which is $20k, so total net income $100k
This is assume that you can claim that unrealised rent as a loss. I believe there are ways of doing that (charity shops for example)
Do you have any examples please?
If they earn an extra £1, the marriage allowance vanishes, and they pay £11,449.54 in income tax and national insurance
That's a 23,822% tax rate on that pound.
You've also got the state where you have 7 kids (say you had 4 from a previous marriage and your partner had 3), and earn in the £50k-£60k range, where you attract a "High Income Child Benefit Tax Charge" which, combined with income and NI, works out to be 102% marginal rate, over a range of £10k.
As the OP said: "A wise colleague told me that until effective income tax rates reach 100 percent, a dollar of income is worth more than a dollar of deduction"
There are cases in the UK where that's demonstratably false. A dollar of income is actually worse than nothing. At the marriage threshold a pound of income is worth £-230. A pound of deduction is worth 33p.
A similar loophole was being used in the UK a few years back: https://www.bbc.co.uk/news/business-16692556
Edit: reading your link it seems unrelated to deductions on taxable income. It's about council taxes on businesses, which are lower for charities than for regular businesses or unoccupied stores. So it makes sense for the owner to let a charity use the space rent-free and pay their 20% of the tax instead of paying 100% of the tax for the empty property.
[1] Actually I may end up paying less taxes if my costs raise, because I will be making a lower profit. But that would result in lower after-tax profits, which is probably not the objective of the scheme.
I can definitely see a situation where the owner prefers to have some storefronts vacant rather than lowering the rents because they aren't sure lowering the rents would actually fill the storefronts and it might cause the other tenants to demand lower rents. Plus it might attract the wrong sort of business.
I've met people who sincerely believed making enough to enter another tax bracket would mean all their income would be taxed at that rate, not just income inside the range.