The Fiscal Cliff: What’s Good, What’s Bad and What’s Ugly for Anyone Owning a Business

After everything, we still have something that’s not that very comforting.

Congress’ negotiations on the New Year’s tax hike as well as spending cuts, which are collectively recognized as the fiscal cliff, got into 2013’s first day and with congress giving the go signal on a concession late last Tuesday.

Here are the details about the measure introduced on the eleventh hour.

What’s good:

-          Making lower than $400,000($450,000 for those who are married) yearly means that the income tax rate’s been permanently frozen at its current level.

-          People having large estates can count themselves lucky. Estate tax exemption got scheduled to drop to $1,000,000 tax free. However, the deal retains exemption at $5,000,000 for every individual.

-          What’s known as the carried-interest tax break survives. What this means is that performance fees being charged to the investors, normally at about 20% of an investment profit, are going to keep a complimentary tax treatment.

What’s bad:

-          If you’re making more than $400,000 ($450,000 for married people), the federal income tax you have just made a leap from 35% to 39.6%.

-          For everybody, their social security payroll taxes just went up. However, a tax holiday temporarily lowered the rate. It used to be 4.2%, now it’s 6.2%.

-          In spite of the high estate tax exemption, what’s known as the estate tax rate went up from 35% to 40%.

-          Capital gains taxes were allowed to go up as scheduled, raising the top rate from 15% to 20%.

What’s ugly:

The mess that’s been left which, by the way, needs some sorting out. Congress negotiated so close to nail biting proportions that a handful of serious financial problems didn’t get addressed. Additionally,

-          The federal debt ceiling, which is at $16.4 trillion, ought to have been achieved come Monday. However, the Treasury is making use of accounting methods in order to push a potential US default off until the month of February, so expect one more hostile showdown come that time.

What’s more is that there was no deal that was reached in preventing scheduled spending cuts that are across-the-board, otherwise called sequester, that would chop of billions in federal funds for many things, such as national defense and non-profit funding, among others. Now, congress has 60 days in order to come up with a deal.

The financial markets have, so far, stayed fairly stable during the fiscal cliff debacle, although analysts have warned that congress will be wise as to not push their luck by getting involved into drawn out matches over economic policy.

5 Proposals in the State of the Union likely to Affect Economy of Silicon Valley

The State of the Union address of President Obama last Tuesday night covered several policy issues which included gun control as well as tax reform

Here is a list of the five main issues the presidential address raised which can largely impact the economy of Silicon Valley

Immigration

Tech companies in Silicon Valley are in a talent war which merge with the countrywide lack of qualified graduates in the fields of math, engineering, technology and science. Obama asked for shortened visa waiting times in his speech Tuesday and actually prodded foreign engineers and entrepreneurs to go the United States.

Manufacturing

Obama highlighted Apple’s 100 million dollar plan to make a manufacturing plant in the US. The company hasn’t announced where manufacturing will be done, but the president asked for more domestic innovation centers that are federally-funded. He also discussed incentives that would encourage companies to come back to the United States.

Minimum wage

Due to voter demand, minimum wage in San Jose will bump up to 10 dollars per hour from 8 dollars this March. Other parts of the region can likewise see a raise of wages if the president holds through on a promise he made to increase minimum wage to 9 dollars per hour.

Tax reform

The president asked for new revenue measures to lessen federal deficit. He said that the country should do away with tax deductions and loopholes for the well-connected and well-off. This would add to capital gains and high-income tax increases following the fiscal cliff deal in the New Year and last year’s Proposition state income tax increase of California.

Renewable energy

Tuesday’s speech tackled climate change as well as the need for more renewable energy sources. The cleantech sector of Silicon Valley can benefit from a bump in federal subsidies with regard to this endeavor. This also matches the freshly announced plan of Joint Venture Silicon Valley to help Yahoo, Google as well as other companies proximate to Moffeet Field in the construction of a smart grid.

Back in Bangkok

The most populous city in Thailand, Bangkok is one of the sin cities in Asia with its booming naughty night life that lures tourists with the promise of sun, sea, food and well, lots of sex. Its land traces its roots to a small trading post during the Ayutthaya Kingdom in the 15^th century. Having magnificent temples and palaces, hectic markets and of course the vibrant night life, it is regarded as one of Asia’s most cosmopolitan cities.

Spending a week in the city of Bangkok, Jason Buzi was busy arranging his flights to Myanmar and the Philippines. It was his third time to visit the country, and even just a short period, it was already enough to remind him that Thailand was still his favorite country in Asia. If he hadn’t spent a month in the country last year, he would have definitely stayed longer. It was one of the few countries in the world that he planned to return to, again and again.

What are the reason whys Jason Buzi kept coming back to Thailand?

• Not only being the most affordable country, it also has better infrastructure than most countries in the region. For example, in Bangkok, you can have your own room for only $6 a night, get an hour long massage for only $5 and eat a filling street meal of pad thai or fried rice for about $1.

• Easy access. Easy to travel but still feels very exotic.

• It is known as the “Land of Smiles” because most people are friendly and generally happy (less aggressive than elsewhere).

• It has the best food anywhere in Asia. If you had enough of Thai food, in the major cities likes Bangkok, Chiang Mai and Phuket, there will be no problem in finding other cuisines. Jason Buzi had been eating a lot of Middle Eastern food during his stay.

• Plenty beautiful temples, floating markets and night markets.

• All kinds of beautifully made handicrafts and souvenirs from Thai silk to woodworks.

• In the southern part of Thailand, some of the best islands and beaches on the face of the Earth are be found.

• In the northern part of Thailand, there are many places to visit like jungles and hill tribes, and activities to do like white water rafting, trekking, and watching elephants.

• A unique culture that is very well preserved despite the rampant globalization, modernization and mass tourism happening in the world.

• Easy access to many neighboring and nearby countries. With cheap and plenty available flights and buses, Thailand is a great base from which to explore the rest of Southeast Asia. 

If you have never been to Asia or never been to Southeast Asia, Jason Buzi highly recommends visiting Thailand first. It is simply the best. The only problem is afterwards, most places that you will visit will gradually become pale in comparison.

Palo Alto: Dine Out Charity Events Held by Nonprofits

Across the US, nonprofit organizations are bucking the trend of having people dine out and have an opportunity to give to charity. Last May was the initial National Dine for Charity benefit.

However, Dine Out events have been staged by local organizations for years now. March 7 marks the fifth year of the yearly Dine Out for Packard which benefits the Lucile Packard Children’s Hospital.

According to Lucile Packard Foundation for Children’s Health community relations officer Mallory Oliphant, part of the bill will go to support for expectant mothers as well as children at the hospital. She said that nearly 60 thousand dollars have been contributed by diners in the last four years the event was staged.

Funds are likewise allocated to outreach programs as well as the research of the School of Medicine of Stanford University. The teen health van of the Lucile Packard Hospital that offers treatment for people without or with little insurance is one of the outreach programs.

Mario Navat, owner of downtown Palo Alto-based Gravity Bistro and Wine Bar, said that his establishment has joined in for a few years. He stated that it is import to him because it is for the children.

His business is promoted in the program and thus revenue results, but he stated that the cause is his focus. He said that they also care for the community.

Mango Carribean, another downtown resto also joined in the first year of the program. Winston Wint, the owner, had his nephew with sickle cell anemia treated at the hospital and so jumped in on the event.

Meanwhile, PACCC or Palo Alto Community Child Care, another nonprofit has also held dine-out benefits. 10 years ago, they started program for children. They have 19 sites across Palo Alto and the event is scheduled every fall.

Palo Alto Community Child Care executive director Janice Shaul said that individuals of all walks of life have been able to help charity with the participation of casual restaurants. She stated that not all would like to dress, but everybody eats. 

The program of PACCC began with 12 to 15 restaurants on its initial year and now has 37.

The charity event was previously just dinners, but now features breakfast, lunch and family-oriented diners and high-end restaurants.

Palo Alto Thinks Over Additional Changes to California Avenue

The City Council will weigh and potentially approve tonight (Monday) the latest California Avenue renovation plan by Palo Alto, which includes a proposal for the addition of pedestrian streetlights to the business street.

The project was planned for over two years and includes a variety of changes with the shifting from a four to a two lane street being the most controversial. The council will however deliberate on other streetscape project elements which includes the proposition for the addition of lights. The Planning and Transportation Commission of the city signed on the proposal last month, that could add over a million dollars to the budget.

Apart from the lane reduction, sidewalk replacement, two plazas and wider crosswalks are also part of the streetscape project. A plaza will be built between Ash and Birch streets which can be converted to a special events plaza and another at Park Boulevard proximate to Caltrain station. The project likewise incorporates new game tables, trash bins, newspaper racks and benches.

The project cost will be bumped up to over 4 million dollars with the streetlights addition. Around 1.8 million dollars in grants was received by the city—Santa Clara Valley Transportation gave 1.1 million which the fees from VTA’s car-registration accounted for 700,000. The balance would be paid by the city which reportedly has a 3.4 million dollar budget, excluding expenditure for the lights. Construction will hopefully start this fall according to the city.

 The council will deliberate at tonight’s meeting whether they will hold the status quo, retrofit 1960’s installed lights or install new ones. Staff recommends the removal and replacement for present street lights with shorter lights as well as roadway-height poles which is valued at 1.2 million dollars.

A Planning and Community Environment report states the replacement of the existing light ensures California Avenue’s best roadway illumination and sees to it that the new streetscape is not damaged by costly repairs.

The California Avenue streetscape project aims to make a second city downtown out of the commercial strip. Mayor Greg Scharff, in his February 27 “State of the City” address pushed the project to be among the major initiatives of the city for 2013. He said that California Avenue will stand toe to toe with Castro Street once finished, referring to the busy downtown strip of Mountain View.

Tonight’s council meeting starts at 6PM. The council will have a meeting at City Hall Council Chambers following a closed session.

3 Kinds of Mortgage Loans

Mortgage loans come in many varieties. This can sometimes spell difficulty in choosing which one is the best for you. So here are 3 main mortgage types available in the market. Majority of lenders offer loans which can be categorized according to these 3.

1. Fixed

These are most popular among the tree. The lender gives you a particular amount which you pay within a fixed period. Most individuals opt for a 30 year fixed mortgage because of low repayment amounts and the evening out of interest rates within the span of 30 years.

However, a setback with regard to a 30 year fixed mortgage is that the total repayment is higher compared to getting a 5 year or 15 year loan. Shorter period loans permits individuals who want to get rid of a loan in a shorter period. However, if you opt for this, you should be sure of your capacity to handle higher monthly dues.

There is likewise a sub-category to this loan which is called ARM or adjustable rate mortgage. Compared to a 30 year plan, this usually starts off on a lower interest. In sum, your mortgage repayment is less each month. Nonetheless you should bear in mind that ARM depends on interest rates and is highly fluctuating. When interests are low, you pay less and when interests are high, you pay more.

2. Convertible Loans

This allows for more flexibility. If interest rates are low, you can opt for ARM; if interest rates are high you can go for fixed rate mortgage.

One example of this is the balloon loan where you repay small amounts monthly for around 5 to 7 years and then you repay one lump sum at the period’s end. This is typically used by those who want to flip houses. They won’t need to lock their cash on a house and still benefit from low rates of interest. Paying the lump sum won’t be a problem since they will get a big amount of money by selling the property.

3. Special

These are offered to a particular group of individuals. For instance, FHA is only offered to those with bad credit or are buying homes for the first time. The veteran affairs mortgage is another example, one which is for armed forces widows.

To know which one is best for you, it would be best to speak to a mortgage consultant or real estate expert like Jason Buzi, who can help you decide the best plan you can go with.

To Rent or To Own?

There still weak returns when it comes to real estate market sales. However, there are still many home buyers who take the risk and reap the benefits of owning a home. Owning can take a toll on you physically, emotionally and financially but the advantages you gain after a few years will outweigh all of these. Here are five facts you can delight in when owning a home in comparison to renting one:

1.   A variety of home you can choose from — Because of the real estate market crash as well as the financial crisis the US experienced in recent years, you can see that there are many homes that are for sale. A quick search on the Web will net you a smorgasbord of properties to choose. Similarly, if you go through MLS or multiple listing services, you will get a bird’s eye view of the number of properties you can buy at a particular location.

2.   You can renegotiate the price — Again, due to the fact that there are many homes available on the market, sellers are compelled to lower prices in order to stay up with the competition. Some even “give away” appliances, furniture, fixtures as well as other items as part of the package. You can read this info in the written purchasing agreement.

3.   Satisfaction of having a property you can call yours — Renting a house can limit the activities you can do and you have to stick with the guidelines set by the homeowners association. Meanwhile, being a homeowner can allow you  the freedom of having more visitors more frequently and having to forever benefit from renovation works as well as other repairs you would do.

While it may be true that renting can result in more convenience for some, owning a home can have you enjoy the benefits thereof for a lifetime (such as renovation and home improvement).

4.    Involvement in community — Long-term relationships with neighbors is easier to establish in a community compared to an apartment or condo. When renting, tenants can easily migrate elsewhere than own a home. By having your own property, it is easier to get involved in community activities.

5.   You can avail of no down payment scheme or get packages with the lowest interest rates — A good credit score is a pre-requisite to enjoy this privilege. You can ask the advice of real estate agents as well as funding agencies to know which kind of mortgage is best for you and your needs.