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Running head: TAX CONCESSION
According to economics, tax concessions can be defined as a special provision for a firm
not to pay a tax that it automatically owes. The local, state or the national government as a means
of investment provides this. It is always realized by the government where there is the need of
seeking or attracts investment, to some extent the benefits of the country might be undermined,
which may otherwise be received from the foreign direct investment. Concerning law, it is the
reduction of the amount of tax that needs to be paid. This element of tax concessions has been
capitalized in most of the countries as a means of increasing investment in the country (Bourassa
and Grigsby, 2000).
The affordability of housing remains a key attribute of the government and at the same
time, the opposition parties in Australia. For this to be evaluated, there is the need for ensuring
that there is increased assessment of whether negative gearing combined with capital gains tax
increases speculative activity in the housing market. Therefore, during the analysis, there is the
need of arguing for and against these speculations.
Negative gearing remains to be a form of financial advantage in that the investor borrows
capital, that he or she is required to acquire income. However, during investment, there is the
expectation of the gross income to generate by the investment. Additionally, there is the belief
that the cost of investment or production to remain low to gain profits. In most of the cases, the
investor may be able to enter into an arrangement with the expectation that he or she will have an
increased tax benefits when the investment is disposed of, and there is an accumulation of losses.
This is the position the investor will move to the tax tr...
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