Posted on 01/23/2015 6:44:06 AM PST by wbill
LOS ANGELES, Jan 22 (Reuters) - President Barack Obama's proposal this week to roll back tax benefits for so-called 529 plans exposes a fundamental disagreement about who is benefiting from these state-sponsored college savings plans.
529 plans are sponsored by states and run by investment management companies. Withdrawals from the accounts can be used tax-free to pay for qualified education expenses at any college or university in the country, such as tuition, fees and books.
Supporters of Obama's proposal point to a 2012 government report showing the plans being used by less than 3 percent of all U.S. families and that these families tended to be much wealthier than those without 529 accounts.
The Government Accountability Office report also estimated that 47 percent of those with 529 plans had incomes over $150,000, while their median assets of $413,000 were 25 times higher than the median of $15,400 in assets for families without the plans.
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(Excerpt) Read more at finance.yahoo.com ...
Pretty soon "rich" will equal "employed"
Social Security was "sold" to an unsuspecting public as just a very minimal wage deduction(less than 0.5% of wages with a low upper limit) and no taxes upon withdrawal. Is that what we have now?
One key aspect is that they are like prepaid cards at your favorite store: they have you setting aside your money and earmarking it for spending on college.
The sheeple then really want to get their kids into the elites’ university system for brainwashing and training - because they’ll pay tax penalties if they don’t.
It’s a boost to the revenue of the elites’ university system. Once the money is set aside, the incentive is there to send the kid, even if circumstances change from when the saving began, and the kid thinks they want to do something else.
Of course for those in higher tax brackets - even the elites themselves - who certainly plan all along on sending their kids to the elite school of their choice, well, it is yet another tax deduction for them.
The poorer sheeple, even if they could take advantage of various tax deductions, generally have a lack of financial sophistication that causes them to simply ignore their options. And if the poor sheeples’ kids do manage to get to college, voila ! They’re in the elites’ indoctrination / training system anyway. So even though they may “better themselves” and rise higher than their parents and ancestors, they’re still serving the elites and are blissfully unaware that they are.
Silly sheeple.
Instead of vilifying the rich for using this tool, why aren’t liberals running public service announcements anymore like they used to for 529 plans to educated the lower income people to use the 529 plans?
Why are liberals so against people using their own money instead of using government loans for their education?
“Rich people don’t due 529, or rather don’t need to.”
Yes, they do. Due to the higher income tax rates for higher earners the tax saving is absolutely needed. When you are paying 42.5% or more in income taxes the 529 plan is very much needed since college now costs over $100,000 for good schools or adding a Master’s or Doctorate. In fact, many Doctorate programs are well past $250,000. That is about a $200,000 tax savings for higher income people.
Yeah, I agree. I heard a guy on the radio saying the other day that the plan is to eventually take these 529s. Who knows.
Frankly, I'm surprised that BO didn't propose forgiveness for "outrageous college loans" ... setting aside the fact that Starbucks Baristas who went $100K in debt for that (fill-in-the-blank) Studies degree, are grownups who knew exactly what they were getting into.
Yes, but he will never go after the universities who peddle these degrees, accumulate huge endowments, raise tuition at rates that eclipse inflation, receive gifts of stock and money that no one pays taxes on, and that retain ‘not-for-profit’ tax-free status.
I remember the preachers at Jeremiah Wright's church used to go on and on about this. How retirement accounts were unfair and they needed to be accessed by the poor.
You are right. This is a trial balloon. And it's not going over very well. This will NEVER be approved by this congress.
All a part of his plan to create only 2 classes in America. The elite and the poor. He's stealing from the middle class to make it happen.
>$150K income and >$450K assets is not, on any level, rich...
This is nothing more than redistribution. Period.
Meh. I don’t see why the government should be in this school business in the first place. There’s no reason there should be any kind of complications within tax law allowing for some income to be not taxed simply because it’s put into a certain kind of savings account, other income to be taxed at one rate, yet more income to be taxed at another. If we eliminate all these tax breaks and subsidies and fees and penalties and whatnot, we could eliminate a huge source of the corruption in politics on both the Repub and Dem side.
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