Posted on 02/02/2015 7:47:09 AM PST by Academiadotorg
While the Obama Administration hatched a plan to make community college free, the White House plotted a change in the tax treatment of savings accounts parents use to pay for their children’s college education.
“During his State of the Union address, President Obama proposed taxing 529 college savings plans,” Alexander Hendrie of Americans for Tax Reform (ATR) writes. “529 tax plans work by allowing families to deposit after tax funds into an account that then accumulates interest.”
“When funds are withdrawn from the account to pay for college they are tax free.” These Education Savings Accounts (ESAs) allow parents to save that they earned and withdraw what they need in order to make tuition payments, tax free. They are frequently called 529s after the section of the IRS code that regulates them.
The Obama Administration initially praised 529s, then, more recently, began dismissing them. Within the past month, the White House floated a plan to change the tax status of 529s, and then anonymously backed off of the scheme.
ATR has a timeline of the Administration’s contortions on 529s here.
Ryan Ellis of ATR notes that the Government Accountability Office (GAO), a research arm of the U. S. Congress, found that “30 percent of households that own a 529 plan earn less than $100,000 per year. Cross-posting with the other 529 data, that means that about 3.5 million 529 accounts will see tax increases even though those account owners make five figure incomes.”
Going to school would be on their terms...
Socialism: No self sufficent good deed EVER goes UNPUNISHED!
Sure. Look for more future proposals allowing indebted college graduates to "work off" their debts by working for the government or in government-approved capacities.
Indentured servitude by a different name, with the government as master rather than an individual lender.
This proposal manifests a total ignorance of who actually runs the country. The upper middle class in blue states would never allow this, so it’s off the table.
I think one would be hard pressed to find a domestic policy initiative of the Obama administration that does not fit handily into one of two categories:
(1) On the plea of making it easier for “the middle class” (or “families” or “ordinary folks”) to do something, making it harder for them do that very thing without recourse to a large government program, or
(2) On the plea of purported economic benefits, diverting tax monies to the benefit of Democrat constituencies or donors (e.g. unions, esp. public sector unions, corporations run by ‘Rat congressmen’s families, single mothers, . . .)
Probably this fits both — the attack on 529 savings plans in the context of government largess toward attendance in post-secondary schools certainly fits (1), though I don’t know the voting demographics or political donation patterns of community college administrators (the real beneficiaries of this proposal were it to pass, don’t think if it happened that community college faculty would see any raises) to prove that it fits (2).
It’s doublespeak cubed
The libs tipped their hand on this initiative, IMHO.
Along with their plan to make CC free comes the idea to increase the number of "counselors" who shepherd students through their education. Who will hire them, pay them, and define their job descriptions?
The Soviet Navy had "political officers" assigned to every ship to insure that all activities conformed to communist party guidelines. They reported to Moscow, not the captain or the admiral, and could supercede their authority if need be. Will these "counselors" be Obama's equivalent of "political officers"?
Fascism differs from Communism in the fact that private ownership is retained, albeit under gov't control. Of course this level of control makes a mockery of the concept of "private ownership".
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