Theory and Application - Research Paper Example

Your Theory and Application Part In recent years, there has been a greater emphasis on better conversation between researchers and practitioners. It is needless to say that without proper knowledge about a subject one cannot provide the desired result. Hence, theory and practice are closely related. Here I provide an analysis of the various journals that have considered theory and practice as essential part in understanding a subject completely. We will further look at how theory is essential for application, and what are the differences that result in our lack of proper application of theory in a practice. “Theory is generally understood as a systematic representation of a genuine problem, articulated as far as possible in mathematical terms in the natural sciences or logical (or strictly linguistic terms) in the life and social sciences” (Stam, 2010). Theory basically refers to the research that leads to some conclusion regarding the hypotheses or that results in derivation of a hypothesis through experimentation. “Practice is viewed as action that treats real things: real acts, real teachers, real children, things richer and different from their theoretical representations” (Mullen, Greenlee, and Bruner, 2005). Application or practice as the word suggests is application of the knowledge i.e. it is the practical aspect of the theoretical background. Since it the application that is usually important considering it is the application or practice that basically judges the theory hence it is important to integrate theory and practice. However, there is a significant gap between theory and practice. Especially, when it comes to the recent research being conducted, practitioners usually remain unaware of them, that has resulted in a widening gap between theory and practice (Wooldridge & Jennings, 1994). Hence it becomes necessary to understand the differences that exist between theory and it application in order to apply theories better to practice. Mullen et al. (2005) while discussing the theory-practice relationship explain that even though most consider theory and practice to be part of same world but even so they have different existence and we need to learn of ways to integrate the two. In their paper, they suggest three basic methods of integrating the two. The three methods mentioned are: metaphor, reflection and inquiry, and binocular vision. Regarding metaphor they state that “Metaphor can be used to capture a flexible, creative, and analytic form of integration…sees metaphor as the use of a word, phrase, or image in place of another to imply a likeness or comparison”(Mullen et al. 2005). They refer to the system where we can analyze the situation, understand the problem, interpret it in various terms so as to be able to think of different solutions to the problem and apply the solution that best suits the problem. Reflection refers to the reflective conversation with the subjects involved. Mullen et al. (2005) refers to reflective practitioner as one who communicates with the subjects involved and thus gathers information that he utilizes in practice. However, it has a limited use since not all areas can utilize the method mentioned. Besides, communication skills are limited to individual abilities and hence do not provide a sure method for bridging the gap. Binocular vision refers to the concept where theory and practice are considered as the two lenses of the same binocular. Thus, they are considered as a part of the whole and are supposed to be naturally present in any given situation (Mullen et al. 2005). Exploring the mentioned methods Mullen et al. suggest that theory and practice are not to be viewed as part of different phenomenon instead they always exist in a situation as a whole. Further, it is difficult to state whether theory follows practice or practice follows theory instead they co-exist like the lenses of a binocular. Hammond, Rosso, Orcutt, and Martin (2011) in their attempt to develop better educational practices discuss how theory can be applied to practice. They mention that while applying theories to practice one should remember that theories do not consider all the variables associated with a situation and hence it becomes necessary to understand that during practice there are more variables that we need to deal with and hence we need to consider multiple theories when dealing with a single situation. “…there is no one-to-one correspondence between theory and practice. Integrating theory and practice is a process of connecting what teachers know about their own students with what they know about learning, motivation, development, cultures, and social contexts, as well as teaching. Theory provides some guidance in making decisions about curriculum and teaching strategies” (Hammond et al., 2011). Thus, in bringing a theory into practice we need to consider the various aspects associated with the situation, and after gaining a proper understanding of the situation we need to utilize that information in application of a theory. Jones and Donovan (2004) explain that there are considerable differences between practitioners and researchers. “…it is often said by practitioners that researchers fail to provide clear, concise and understandable explanations of theories and research findings” (Jones & Donovan, 2004). They further provide evidence that show that there are many discrepancies that exist between practitioners and researchers, even though there are many research being organized in various field yet not enough is being done when it comes to practice, it is either because the practitioners largely remain unaware of the theories, or the necessary funds required for bringing the theory into practice is not present, or the theories are not applicable under practical situations. There can be many reasons that result in failure of theory being brought into practice. In their study, Jones and Donovan (2004) found that usually the newest theories are the most neglected because they are ignored in a course curriculum. Even though it is impossible to completely change the course curriculum, but it is the duty of the professor to refer to the new theories and research being conducted so that the students are aware of them, and are enough capable to bring them to practice. Having studied the various articles exploring the relationship between theory and practice, it can be concluded that even though there are many differences that exist between theory and practice, but it is not impossible to integrate them. We need to see the situation as a whole and not study individual aspects when bringing a theory into practice; this will help in their co-existence and finally integration. Part 2. The theory I am going to discuss is that the IRS initiative of making tax returns easier and more affordable to process by RAL lenders has led to increase in practices of predatory lending. Internal Revenue Service (IRS) in 1980s started a new measure to allow tax payers to obtain their tax refunds quickly, the measure was called Refund Anticipation Loan or in short RAL (Kantor, 2011). As the name suggests, RAL refers to loans provided to customers on basis of the tax refund they anticipate. “RALs are short-term, high-interest bank loans that are advertised and brokered by both national chain and local tax preparation companies. Although the annual percentage rate (APR) on RALs can be over 500 percent, they allow taxpayers to receive cash refunds quickly—sometimes within the same day and even within an hour of filing their tax returns” (U.S. Government Accountability Office, 2008). RAL like the homeownership scheme propagated by Bill Clinton is a feel-good scheme (Coy, 2008). The problem with these schemes lies in the fact that they promote illegal means. Also it is usually seen that these schemes are not as tightly bound by regulations as some other scheme would be, generally this happens because these schemes generally remain popular with the public and hence are politically motivated. Further, it is generally the lower income class that is found to be taking an active participation in such schemes, and hence are the ones who also get embroiled in the inverse consequences of the schemes. “According to a 2007 report by the National Consumer Law Center and the CFA, there were 9.6 million RALs in the 2005 tax-filing season, down from 12.38 million in 2004”(Fox, 2007). Despite, the popularity of RALs initially and intense campaigning by the government promoting the scheme, the fall in RALs suggest that people are losing interest. Even though theoretically speaking RAL was a simple way of making the tax refund a quicker process, but even so practically it fails. Kopczuk (2005) explains that the electronic filing technology was a sort of a revolution in filing tax returns not just because it made the filing of tax returns quicker but also because with the help of a tax preparer the whole process was made easier, which brought more number of people to file for tax returns. It is through these tax preparers that the customers avail of the service of RAL. The tax preparers are usually private banks, which assure the customer of benefits through RALs. Consumers see tax refund as a sort of savings, and hence consider it their right to utilize what is rightfully theirs in a way that they see right. However, the problem arises when lower income group starts utilizing RALs whenever they need money, it is like a credit card scheme, where you get money when you need but you cannot see the debt rising till “loan sharks” arrive at your doorstep. Predatory lending has only risen through the scheme. The problem with such schemes is that they are sugar-coated and seem beneficial but then ultimately they prove harmful. Even though the scheme does prove helpful in fast returns but then with the low income group being the major part to utilize RAL, the scheme has only led to increase in predatory lending practices. As a result there is much negative feeling about the scheme and hence has resulted in its less acceptance. Even for the low income group, when the debt rises, they do realize that the scheme is not beneficial in the long run. Being placed in the same category as pawnshop loans, auto title loans, payday loans and rent-to-day arrangements, it can only be said that even though theoretically it was a very good scheme like most other schemes mentioned but at the end of the day bringing a theory into practice is very difficult. Not just should have there have been more restrictions as to who can apply for RAL or how many times, but also people should be educated about such schemes before their introduction and one needs to consider the situation as a whole even when formulating the scheme to understand what it’s repercussion could be. Part 3. Kantor (2011) in his study explains that application for RALs increase during tax season. What people do is use RAL for payment of their taxes, or other expenditures. “Many of these 20 million filers will turn to these devices because they need money fast to pay bills, especially from holiday shopping; others need part of the expected tax refund to pay for tax preparation” (Kantor, 2011). RAL is an easy way out of all the debts that rise as a result of holiday shopping or when you don’t have money to pay taxes. Without a doubt, the ones who need to use these measures are the ones who earn less. “Just 20 percent of the nation's communities account for nearly 70 percent of all RALs and RACs... In many very poor neighborhoods, RALs and RACs account for more than 40 percent of all returns with refunds... The working poor are the heaviest users of RALs and RACs, the researchers found” (Kantor, 2011). Kopczuk (2007) in his study explains that RALs bring great revenue to companies that are involved as tax preparers. Hence, for companies RAL are a good source of income. With rising fees for both e-filing of tax refunds and application of RAL, the consumers seem to be in a loss except that they receive the much needed money in the shortest time possible. Even though usually tax preparers are very accurate in their anticipation of what the tax refund will be, but in case the desired refund is not obtained then the remaining debt is to be provided by the customer. Thus, even though the loans are small in amount but they add up gradually and increase the debt of the customer. Apgar and Herbert (2006) in their study about subprime lending state that “The fees for these loans rise with the amount of the loan, but the highest APRs are associated with the smallest loans…the loan fees offered through Household Bank ranged from $34.95 for loans of between $200 and $500 to $89.95 for loans between $2,001 and $5,000. Assuming a ten-day loan term (the amount of time the IRS claims it will pay most refunds electronically), the associated APR for a $200 loan would be 638 percent, 111 percent for a $2,001 loan and 19 percent for a $5,000 loan”. Since, the fees is not very high and seems affordable for most especially when the tax preparers guarantee the customers of quick money, but the APR is very high and hence the debt on customer increases gradually. As a result, there is rise in predatory lending practices which includes frauds and “aggressive sale tactics” as generally the customers remain unaware of the terms and conditions of such loans (Apgar and Herbert, 2006). U.S. Govt. Accountability Office (2008) in their document state that IRS officials are concerned about RALs and whether consumers are properly educated about the loans and their terms. On investigating it was found that, “Of the 40 tax preparers we called or visited, 37 offered RALs. 13 tax preparers offered year-round tax preparation in their own stand-alone offices, while 27 were open only during the tax season and operated at tables or desks within existing businesses offering other products and services. Of these 27 preparers, 13 were located in businesses that target low-income customers...” (U.S. Govt. accountability Office, 2008). The data is a clear indication that RAL has led to increase in predatory lending practices. Fox (2007) also found that RLAs increase predatory lending practice: “RALs are bank loans that require taxpayers to immediately repay the bank out of current funds, even if the tax refund expected to repay the loan is denied or less than the loaned amount. Consumers who get RALs run the risk of cross-lender debt collection, a unique risk for borrowers” (Fox, 2007). As had been discussed in part 1, in application of a theory one needs to consider the situation as whole, understanding the various variables that form a part of the situation. In application of RAL a similar approach should have been undertaken. Electronic filing was a good approach because tax rules and regulations are very difficult for people to ujderstand in general. RAL provided them a means of getting their refunds earlier, especially since tax refunds take a long time and hence usually people don’t file for them because of both complexity in understanding the rules and long process involved. In order to encourage people to file for tax returns the only option was to make the process quicker and RAL did exactly that. However, as had been said, there should have been a broader consideration of the situation. It should have been understood that RAL may lead to increase in predatory lending like other schemes as payday loans, car title loans etc. It can be concluded that RAL has led to a rise in predatory lending and in order to prevent that more restrictions are needed as to who can provide the loan, how many times can one apply for the loan, minimum requirements for the loan. Further, there should be stringent control over those who consider it as a good business to earn extra money. Besides, people need to educated about it, and about their rights. References Apgar, W.C. & Herbert, C.E. (2006). Subprime Lending and Alternative Financial Service Providers: a literature review and empirical analysis. Retrieved from http://www.huduser.org/publications/pdf/sublending.pdf. Coy, P. (2008). Bill Clinton’s Drive to Increase Homeownership Went Way Too far, Bloomberg Businessweek. Retrieved from http://www.businessweek.com/the_thread/hotproperty/archives/2008/02/clintons_drive.html. Fox, J.A. (2007). Fringe bankers: economic predators or a new financial service model? Western New England Law review 30 (1), 1-15. Retrieved from http://digitalcommons.law.wne.edu/lawreview/vol30/iss1/9. Hammond, L.D., Rosso, J., Orcutt, S., Martin, D. (2011). How People Learn: introduction to learning. Retrieved from http://www.learner.org/courses/learningclassroom/support/01_intro.pdf. Jones, S.C. & Donovan, R.J. (2004). Does Theory Inform Practice in Health Promotion in Australia? Health Education Research 19(1), 1-14. Retrieved from http://her.oxfordjournals.org/content/19/1/1.full.pdf. Kantor, S. (2011). For Working Poor, Tax Season Brings Rush to Use Refund Anticipation Loans and Checks. Urban Institute. Retrieved from http://www.urban.org/publications/901410.html. Kopczuk, W. (2007). Electronic Filing, Tax Preparers, and Participation in the Earned Income Tax Credit. Journal of Public Economics w11768, 1-52. Retrieved from http://www.nber.org. Mullen, C.A., Greenlee, B.J., Bruner, D.Y. (2005). Exploring the Theory-Practice Relationship in Educational Leadership Curriculum Through Metaphor. International Journal of teaching and learning in Higher Education, 17 (1), 1-14. Retrieved from http://www.isetl.org/ijtlhe/pdf/IJTLHE17.pdf. Stam, H.J. (2010). Theory. Encyclopedia of Research Design, SAGE Publications. Retreived from http://www.sage-ereference.com.proxy1.ncu.edu/researchdesign/Article_n458.html. U.S. General Accounting Office (2008). Refund Anticipation Loans. Retrieved July 23, 2010 from GAO www.gao.gov/new.items/d08800r.pdf. Wooldridge, M. & Jennings, N.R. (1994). Intelligent Agents: theory and practice. Knowledge Engineering Review. Retrieved from ttu.edu. Read More