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MSI Discusses Continuous Process Improvement and Tax Write-Offs

MSI Discusses Continuous Process Improvement and Tax Write-Offs

If the government is serious about bringing jobs back to America – and if it believes that our already low unemployment rate should be improved, then perhaps learning about process improvement, while writing the learning costs off as an expense, might be a sensible next step for businesses? 

Early proposals by Biden and his Democratic colleagues to raise tax rates were met with opposition in Congress from Republicans and a few Democrats. However, a surprising U.S. Senate reversal by Senator Joe Manchin (West Virginia Democratic), a swing vote in the split Senate, has boosted Biden’s tax agenda new. Since the 1940s, the amount of tax revenue contributed by American corporations to fund schools and roads has decreased.

Some love the idea, others hate it, where do you stand?

Biden has emphasized that businesses should instead pay a “fair share,” and both parties’ rounds of tax cuts and deregulation have bolstered this. The “compromise” bill includes $430 billion in electric vehicle tax credits, new energy spending, and investments in health insurance. It more than pays for itself by enforcing existing tax laws and increasing the minimum tax on large corporations.

During a speech, Biden stated that the agreement would “start to restore fairness to the tax code by making the largest American corporations pay their fair share without any taxes on people earning less than $400,000 per year.” The bill would levy a 15% minimum corporate tax for companies with profits of more than $1 billion, raising $313 billion over a ten-year period. Companies could offset the 15% with net operating losses and tax credits. United States corporate tax fell from 35% to 21% following a 2017 tax cut by then-President Donald Trump and his Republican allies. However, many companies pay much less, and some of the largest pay no federal taxes.

“This bill will cut the deficit beyond the $1.7 trillion in deficit reduction we achieved this year, which will also help fight inflation,” Biden said in a statement in 2022. “And we’ll pay for it all by asking large corporations to contribute their “fair share of taxes,” with zero tax increases for families earning less than $400,000 annually,” he said.

Wall Street believes the tax hikes will be manageable for most companies, though!

Business advocacy groups opposed the 15% minimum tax rate for big corporations, which was recently passed by Congress as part of the Inflation Reduction Act, claiming it was a “terrible policy” that would make America “poorer.” On the other hand, Wall Street analysts believe the legislation will have little impact on company earnings or future investments. Companies with annual revenues of more than $1 billion will now be required to pay a minimum tax rate of 15% and a 1% surcharge on stock buybacks. These tax reforms, aimed primarily at the largest corporations in the United States, such as Alphabet, JPMorgan Chase, and Facebook parent company Meta, are expected to reduce the federal deficit by $300 billion over the next decade.

So, how will these companies mitigate the potentially harsh effects of this legislation? Tax deductions. When President Biden took office in 2021, he only sought to repeal some existing tax cuts. He did not carry out a complete repeal, instead allowing businesses to benefit from some of the tax cuts enacted by Trump’s administration.

Janet L. Yellen, President Biden’s nominee for Treasury Secretary at the time, stated that Mr. Biden had stated that he “only wanted to repeal sections of the 2017 tax cuts benefiting the large corporations and highest-income Americans.” However, she added, “he has been very clear that he does not support a total repeal.” As a result, most businesses continue to benefit from tax write-offs that existed before the Biden administration.

Most businesses can also keep their competitive advantage by focusing on continuous process improvement. Process Improvement is a business practice that business leaders use to increase the effectiveness and efficiency of business processes by discovering and mapping them. Then, the next steps are documenting the business processes, analyzing, and redesigning them. Businesses that want to capitalize on continuous process improvement must hire highly skilled individuals with the appropriate skill set.

According to the Management and Strategy Institute, today’s job market is extremely competitive, and having skill certifications shows employers that your abilities have been independently tested and verified. Businesses with a highly skilled workforce can improve operational efficiency, increase productivity, and withstand harsh business policies – and even tax laws. 

Final Thoughts

Businesses must prioritize continuous improvement and embed it throughout the organization. It’s the best strategy to survive in a constantly changing environment. Businesses that can accomplish this effectively will thrive.

If you enjoyed this article here is some more suggested reading.

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