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What You Should Know About Tax Deductions

 

Deduction.  A very common word used when the topic of taxes is discussed.  But what does it actually mean?

First, it matters whether the deduction reduces taxable income (the correct use of the word) or whether it reduces the amount of tax to be paid (actually called a ‘tax credit’; however, the terms are often used interchangeably).  Conceptually, though, the idea is the same:  reduce the amount of taxes actually paid by the end of the calculation.

Our current tax code includes a seemingly vast number of these deductions.  Why?  Wouldn’t the process of paying income taxes be simpler without them.  Undoubtedly.  In fact, several noteworthy individuals have suggested such a system, typically called a ‘flat tax’ system.  To file one’s taxes, write down the amount of income, multiply it by a standard rate (15% to 20% has been suggested) and voila! the taxes are done.

But deductions do serve a purpose.  They are granted by Congress via the tax code to encourage certain behaviors.  For example, mortgage interest paid on one’s home can be deducted.  This encourages home ownership by ‘rewarding’ homeowners a reduction of taxable income for the amount of mortgage interest paid.  Giving to a recognized charitable organization is also ‘rewarded’ by allowing that donation to be deductible.

However, sometimes the reason for the deduction isn’t as clear as these examples.  Consider a recent controversy over deductions for the purchase of small jets.  This, at first glance, seems an odd choice for a deduction.  Only the ‘rich’ can buy such items; why grant them another deduction?  But consider the reason behind this.  While the average household will not purchase a jet, even if deductible, the purpose is to encourage the behavior of building jets. 

That is, by benefitting those who buy the jets, more jets are bought, and more people are hired (or keep their current jobs) to build the jets.  So the intent is not necessarily to reward rich people who buy jets; the intent is to have more jets built and employ more workers in that industry.  It just happens that because jets are expensive, fewer people can do so.  Were the deduction for buying PCs or televisions, we all could do so. 

It’s human nature:  we like deductions we can use (mortgage interest and charitable contributions); we sneer at those we can’t. 

So next time, consider which behavior a deduction is meant to encourage.

Submitted by Richard Hale, Midway College Business FacultyRichard Hale, Midway College Business Faculty

 

Where has all the grammar gone?

 

My niece is a grade school English teacher. One evening after a family dinner, we got talking about the parts of speech.  Those of us from older generations could still proudly spout off all of the prepositions in alphabetical order.  My niece looked slightly confused as to what a preposition actually was.  That led us to the parts of speech and sentence structure. She seemed OK when we talked about nouns and verbs, but when we got to objects and predicates, she looked lost.  That led to a favorite back of the napkin activity - diagramming sentences.  The older generation handily whipped the younger generation who are still puzzled as to why we'd find this to be amusing and important post-prandial fare.

There are many reasons grammar is suffering a sad fate.  The ever increasing use of electronic devices has created a communication short hand in which grammar plays little part.  And then there’s the issue of our education system.  My niece got her primary education in the era of descriptive learning. I got my education when prescriptive learning was still the norm.  Memorizing grammar rules has largely taken a back seat to other forms of learning.  That’s too bad. It’s too bad because grammar still matters – in school, in life and in business.

In business, grammar matters a great deal.  Whether you're trying to impress a new customer or convince your boss you need a raise, good grammar helps.  This is true for both writing and speaking.  If you want to be taken seriously in any business setting, arm yourself with good knowledge of how the language is structured.  This will help you get your message across clearly and concisely. 

Consider the case of a customer who receives two proposals on his or her desk for a new marketing strategy.  The two proposals are generally comparable in terms of cost and overall approach. One has a few typos, misused words, and problems with punctuation and grammar.  The other is typo-free and written in clear, concise, correct English.  Which proposal is the customer going to chose?  Presentations and proposals (both written and oral) are a reflection of the work quality that the customer can look forward to during the project itself.  Attention to detail and precision in the proposal gives the recipient confidence that the project itself will receive the same level of care. 

Using good grammar communicates knowledge, know-how and attention to detail.  These are all essential traits that customers, bosses, and instructors need to know you possess.  You can’t convince them without a good command of the English language.  Understanding how the language works improves your academic and professional image.  Using good grammar and punctuation helps build authority, validity and power.  It’s an important tool that can lead to more customers and more business. 

Laura D'Antonio - Midway College Business Faculty

D%27Antonio Laura resized 600

American Health Care: Navigating the New Frontier

 

Authored by Karen Clancy, MBA – Midway College Business Faculty 

American Health Care:  Navigating the New Frontier

Contemporary health care administrators are leading and directing an exciting and challenging new era as we discover innovative and revolutionary ways to heal.  Our work involves making decisions about life-saving technologies, planning and delivering services to meet growing demands, struggling to contain costs, and preparing for health care reform.  We’re navigating the new frontier of American health care.

Innovative Technologies

Never before have we had so much technology available at our fingertips.  Recent technological developments used to diagnose and treat illness include innovations like micro-invasive surgery, digital imaging, telemedicine, a host of effective new medications, gene therapy, and electronic medical record, just to name a few.  Offering these new technologies is transforming the way we provide health care. 

Internet-based social media platforms such as Facebook, Twitter, You Tube, blogging, and text messaging are also changing the way we seek and deliver health care services.  Health care organizations are using social media tools to provide health and wellness education, disease management, health and services information, and even scheduling and registration access. 

Growing Demand

While technology is transforming health care, the aging population is increasing demand for services.  The Administration on Aging projects the population over 60 years of age will grow from 16% of the population in 2000 to 25% in 2050.  On average, aging consumers are hospitalized more often and have longer lengths of stay.  (Administration on Aging, 1900 – 2050)  They need and use more health care.

Health Care Administration Career Outlook

What does this mean for someone who is interested in a health care administration career?

Innovation and dynamic changes in American health care will require the leadership and direction of health care administrators more than ever before! 

According to the U.S. Bureau of Labor Statistics, the future job market for Medical and Health Services Managers (Healthcare Administrators or Executives) is promising.  The job market is expected to grow “faster than average” for all other occupations.  The most recent Occupational Outlook Handbook projects job growth of 16% between 2008 and 2018 (from 283,500 to 328,800 jobs). (Bureau of Labor Statistics, 2010 – 2011)

There are many different types of health care administration or health care manager jobs in hospitals, physician offices, community and public health, government, insurance companies, managed care organizations, mental health and long-term care, medical rehabilitation and post-acute care.

Health care administrators typically like to work with others and are good at planning, organizing, evaluating, and leading.  They also enjoy learning new things about their dynamically changing profession.  Standard education includes a bachelor’s degree followed by a master’s degree. 

Midway College

If you would like to learn more about how you can earn a Bachelor’s degree in Health Care Administration at Midway College, visit www.midway.edu.

Karen Clancy, MBA – Midway College Business Faculty 

Karen Clancy Health Care Administration Faculty

Creating a Paradigm Shift in the Midway College Business Curriculum

 

Authored by Dr. Marla Ashe

According to the U.S. Department of Labor Statistics for 2011, the unemployment rate in the U.S. is 9.1%, and in Kentucky, 9.5% (US Department of Labor Statistic, 2011). Figures of this magnitude naturally raise concerns for those of us in business education. How does one provide students with a competitive advantage in the global and domestic employment arena? This question requires an examination of teaching methodology.

As a marketing practitioner for consumer packaged goods and products for over twenty years, my teaching philosophy is based on my experiences in the corporate world.

An environment should be created that allows learners to gain skills and knowledge through practical application of classroom concepts. My goal is to provide the opportunity for them to improve their critical thinking and application skills by using techniques that engage the student, such as case study simulations and student multimedia presentations. Also, learners participate in facilitated lectures where both the professor and students share real life business experiences.

My teaching method reflects service learning pedagogy. Service learning enables students to integrate textbook concepts in a real life business setting where they solve business issues in local communities and/or businesses (Giles & Eyler, 1994; Kielsmeier, 2011). This methodology is supported and encouraged by business leaders because it equips students to solve global business problems (Zlotkowki, 1996; Manolis & Burns, 2011).

The leading international business school accreditation body, the Association to Advance Collegiate Schools of Business (AACSB), requires the inclusion of service learning methodology in business curricula and focuses on the schools by utilizing measurable outcomes (Ames, 2006).

In addition, colleges and universities can implement this methodology through business organizations such as Students in Free Enterprise (SIFE). Its mission is to bring together the top leaders of today and tomorrow to create a sustainable world through the positive power of business.

I introduced SIFE to Midway College in 2010 as the official business club. The purpose of the organization is to provide opportunities for students to apply classroom concepts in a real business setting through problem solving. At the same time, Midway students are exposed to Fortune 500 companies that have partnered with SIFE.

The SIFE team works with organizations in the Lexington area as business consultants in project management, marketing, advertising, fundraising, and global sustainability. Their first year of competition earned Rookie of the Year and second runner-up at the 2010 regional competition. That is the result of the students’ ability to apply what is learned in the classroom in the real world.

Midway College has begun the curriculum paradigm shift by its creation of, and support for, SIFE.Dr. Marla Ashe

If you would like to learn more about Midway College’s SIFE team, have business problems for which students can be of assistance, or provide financial or in-kind support, please contact Dr. Marla Ashe at mashe@midway.edu.

100 Years of Scientific Management & It's Still Relevant

 

The year 2011 marks the centennial of the first publication of Frederick Winslow Taylor’s The Principles of Scientific Management.  While we often refer to Taylor’s work in the management courses we teach at Midway College, there are many that think of that approach to management as passé in 21st century America.

However, a recent article in Bloomberg BusinessWeek highlights how current the fundamentals of scientific management still are in many segments of industry.  The article focuses on the Quick Service Restaurant industry, and how essential the search for the ‘one best way’ remains as a key to company success.  From the article…

“Go into the kitchen of a Taco Bell today, and you'll find a strong counterargument to any notion that the U.S. has lost its manufacturing edge. Every Taco Bell, McDonald's, Wendy's, and Burger King is a little factory, with a manager who oversees three dozen workers, devises schedules and shifts, keeps track of inventory and the supply chain, supervises an assembly line churning out a quality-controlled, high-volume product, and takes in revenue of $1 million to $3 million a year, all with customers who show up at the front end of the factory at all hours of the day to buy the product. Taco Bell Chief Executive Officer Greg Creed, a veteran of the detergents and personal products division of Unilever, puts it this way: "I think at Unilever, we had five factories. Well, at Taco Bell today I've got 6,000 factories, many of them running 24 hours a day.”

Midway College is actively connecting business theory and business practice.  Learn more about our business programs visit us at http://www.midway.edu.

This post was authored by Richard Hale, Midway College Busines Faculty member.

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