The Other Side of the Tax Bill and the Net Neutrality Repeal

Survival Saturday is a round-up of the week’s news and resources for folks who are interested in being prepared.

This Week in the News

This was a confusing week for most people. The media is telling a lot of dramatic stories about the new tax bill and the repeal of Net Neutrality, but what is the truth?

There is more than one side to these stories, and today on Survival Saturday, we’ll take a closer look at both.

Is this the end of the Internet?

The repeal of Net Neutrality has caused more hysteria than the institution of indefinite detention. Which is pretty mindblowing if you think about it.

I’ll be honest. I don’t completely understand this but here are a few thoughts:

  • Since when has repealing anything that President Obama said was wonderful a BAD thing?
  • The internet was perfectly fine without Net Neutrality for a long time.
  • Why would huge companies jack up their prices and make them unaffordable when little companies could swoop in and charge less?

I am really unconvinced that this is the end of the internet. And you know me. I’m all about the doom.

But opinions differ. Here are some opinions from reputable sources. Read them over and keep in mind that NONE of us has the full story.

It’s rare that I don’t have a firm opinion but on this one, although I lean to the repeal as being a good thing, I feel like there are a lot of smoke and mirrors and that no one actually knows what the heck is going on.

Is the new tax bill good or bad?

First of all, it’s more than a thousand pages, so it’s a safe bet that no one has actually read the whole thing. I really think that this is a terrible practice and is the reason a lot of bills get passed that never would if members of Congress were forced to vote openly on them.

Here’s a quick summary of the bill.

  • A less generous corporate rate cut: Republicans may cut the corporate rate to 21% from the current federal rate of 35%, instead of the 20% proposed in both the House and Senate bills. The new rate would start in 2018.
  • A lower top individual tax rate: The top individual bracket would drop to 37% instead of the 38.5% proposed in the Senate bill. It would still be down from the current 39.6%.
  • Keep the estate tax, but raise the threshold to qualify: Instead of phasing out the estate tax over time, like the House bill, the compromise bill would instead simply increase the threshold for an estate to qualify — from $5.6 million to around $11 million. That aligns with the Senate bill.
  • Repeal the corporate alternative minimum tax (AMT): The corporate AMT in the Senate bill was a sore spot for many companies because it would have negated the effects of many popular deductions and credits, like the research and development credit. (source)

Michael Snyder says that it WILL reduce tax bills for most of us, but not by enough to really make it noticeable. The Washington Examiner breaks it down into easy-to-grasp numbers:

In 2019 the middle-income quintile (or one-fifth) of U.S. households would receive an average tax cut of $840, while the top quintile would receive $5,420. At first blush, the top group seems to do better.

However, the top group currently pays far more in income and estate taxes, so its relative cut would be smaller. The tax cut for the top quintile would be 8 percent of current taxes, while the cut for the middle quintile would be a huge 23 percent. The Senate bill trims the top income tax rate and the rate on small businesses, but it cuts rates, doubles the standard deduction, and increases child credits for the middle class.

Let’s look at other TPC data. The Senate bill would give 62 percent of the overall tax cut to the top quintile in 2019. But that group pays 84 percent of individual income taxes and 67 percent of all federal taxes. Since the tax cut percentage for that group is smaller, it would pay a larger share of overall federal taxes going forward.

What about the middle quintile? It currently pays 10 percent of all federal taxes, but would receive 13.5 percent of the Senate bill’s tax cuts in 2019. Thus, middle earners would gain an extra-large share of the tax cuts.

As for lower-income households, they would receive a subsidy increase. Currently, the bottom two quintiles of households do not pay any federal income taxes on net. Yet those groups would receive substantial tax “cuts,” which would be largely an increase in refundable tax credits. (source)

So, really, it depends on how much money your family makes whether this bill will help you or hinder you. This bill has been passed by the House and will be voted on by the Senate this coming week, where it appears that it will pass. Further reading:

Taxation is legalized theft anyway, so the only tax bill I could get behind is one that eradicated it. Trust me, there’d still be roads.

Other Articles of Interest

Be sure to check out Preppers Daily News for all the most important links, every day.

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Anything to add to Survival Saturday?

Do you have any news links you want to share? What are your thoughts on the topics above? Now’s the time! Please post your links in the comments section below and join the discussion!

Daisy Luther

About the Author

Daisy Luther

Please feel free to share any information from this site in part or in full, leaving all links intact, giving credit to the author and including a link to this website and the following bio. Daisy is a coffee-swigging, gun-toting, homeschooling blogger who writes about current events, preparedness, frugality, and the pursuit of liberty on her website, The Organic Prepper. Daisy is the publisher of The Cheapskate's Guide to the Galaxy, a monthly frugality newsletter, and she curates all the most important news links on her aggregate site, PreppersDailyNews.com. She is the best-selling author of 4 books and lives in the mountains of Virginia with her two daughters and an ever-growing menagerie. You can find Daisy on Facebook, Pinterest, and Twitter.

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