Thats the question many Repbulicans are questioning.  They argue that most of the people that would be affected by extending the tax cuts are small business owners.  They feel that extending cuts would enable business owners to invest more into their company.  However the problem is that a lot of small business owners don't make $250,000 or more per year.  The Democrats contend that giving tax cuts to the rich will not erode the economy. 

Many of the business today are sitting on cash because they are uncertain of the future.  Companies are not willing to hire until a much clearer picture of where the economy is going develops.  Companies that are making money and the owners who run them say they would make different decision based on if the Bush tax cuts are not extended. 

Over the last few decades, changes to the tax code has many companies reporting their income on the individual income.  A S Corp filing with the IRS allows corporations to report their income on personal tax returns.  This means that companies making millions of dollars, those millions of dollars are being reported on individual tax returns.  Corporation are not getting taxed anymore as they did before with C- Corps.  Therefore the argument is that the companies making millions of dollars are not being funneled back into the company because the individuals are getting taxed more.

The response to this is that these rich individuals could in fact pay themselves less and invest the saved money back into the company.  Therfore the impact of the Bush era tax cuts that are expring will probably not effect the company.

Although the recession isn't over yet, it's important to think ahead in your business about what to do when the recession is over. Some industries are already starting to feel the pinch ease, and though we're far from over there are things we can do things in our own business to help ourselves, and in turn help the economy. In an economy as bad as this one, it's not only important to try and get business but also to make busisess. By that, you should be out there spending some money. Times are tough but instead of saving every penny, set aside some money to buy something for yourself or your family. This helps the economy a great deal, especially when most people are saving every extra dime they have. It's easy to see the cycle, when money is spent, employees must be hired, they spend, and more employees are hired elsewhere. This may not be the best solution for everyone, but if everyone who could, just set a little bit aside to buy something every month, the economy should feel the impact somewhat. In order to restore the economy, everyone must do a little part, and for most of us, this is the only part we can do.

The Huffington Post has a great article on why it's a great time to start a business. Though many might think that the current state of the economy is not ideal for the start of a new business, many forget that if you have a good idea for a business, anytime is great time to start. The article mentions FedEx and Intel which both started as small businesses, during an economic decline. The reason why a lot of these Fortune 500 companies are able to start their companies during harder times is because the Small Business Administration is still working to help individuals and small businesses get off their feet off the ground or expand their companies. The SBA doesn't just help when it comes to lending money to small business, their site also has ample information and advice for those wanting to start their own business. It's important to not only research as much as you can about business, before dipping into an area you're unfamiliar with, but also talk to people or read about other successful businesses that you respect and admire. If you have any questions on starting your own business, forming a corporation or an LLC, give us a call at 866-999-8200.

The recovery in the housing market has made some significant changes to the lending industry.  To avoid having the problems that cause so much destruction in the U.S. economy, the lending institution is becoming more diligent about who it lends money too.  Gone are the days in which to qualify for a loan you have to prove that you're alive. 

Lenders are asking more of the borrower to provide additional information that it may not have requested in the past.  For instance, lenders are now asking borrowers to verify every deposit to their checking account that is over a certain amount.  Also lenders are making it more difficult to qualify for their best rates.  Previously, borrowers who had a credit rating at about 700 would qualify for their best rates. Now to get the same rates, lenders require borrowers to have a credit rating of over 740.  This is fairly tough for most American's who have undergone previous foreclosures, missed payments, or other reasons that dropped their credit score. 

Lenders have also done a full credit check on borrowers just before closing.  This is intended to make sure that borrowers aren't extending themselves beyond what they can afford prior to getting loan approval.  Therefore to prevent a loan from falling through, experts recommend that you hold off opening any additional lines of credit before closing on your loan.  So don't apply for car loans, don't open credit cards, and avoid opening credit lines when purchasing appliances for the home.  Lenders will see the opening of credit lines as a concern and will have to ask for verification and additional question before proceeding on the loan.  This may result in a delay or a cancellation of the loan alltogether.

The additional requirements on borrowers may seem daunting, but overall it is best for all because it will prevent something like what we experienced from happening again.  Discouraging people from borrowing loans that they can't afford is the overall goal of the lending industry now.  We can all benefit from that.