Obama Drops Proposal to Tax 529 College Savings Plans

[Ben]

Obama has dropped his idea of taxing 529 tax-deferred college savings plans. I couldn't believe he proposed it in the first place, considering how popular the 529 plan is not only with the Middle Class, but with the left and right coast liberals.

In fact Nancy Pelosi even told him it was a bad idea and to drop it. Nancy Pelosi. It's pretty bad when you're so far to the left that Pelosi has to rein you in.

[cassandra and sara's daddy]

I was wondering if that was a feint to distract. It's hard to imagine it was serious


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[French G.]

Damage done. Watch parents everywhere stop doing 529. Contributing extra to a 401K and using that for your kid's school is probably better in any case.

[RoadKingLarry]

Well,  it's not like Obama ever had to worry about paying for college....

[MechAg94]

Damage done. Watch parents everywhere stop doing 529. Contributing extra to a 401K and using that for your kid's school is probably better in any case.

Yeah, Democrats have never proposed taxing 401K plans before.   

[cordex]

Yeah, Democrats have never proposed taxing 401K plans before.   

Beat me to it.

Same rhetoric applies.

[roo_ster]

BHO has squeezed the rich as much as he can and is getting fewer returns as the rich maneuver their money to avoid taxation.  Funny how hte rich can afford good accountants and can arrange their lives to maximize their wealth.  Almost as if them being rich is not just some winning ticket in the lottery of life(1) but a result of other factors intrinsic to them.

The middle class is a big target (lots of them) and they can not afford to arrange their life to avoid taxation.  They get to take it in the face.  Besides, BHO despises the middle class.



(1) Credit to Richard Gephart

[Perd Hapley]

Obama to Tax College Savings: Women and Minorities Hardest Hit

[French G.]

Yeah, Democrats have never proposed taxing 401K plans before.   

Well, they are taxed at withdrawal. Of course the ideas have been floated to eliminate the pre-tax status of contributions, kill Roths and such. Those things by legislation are known non-starters because you can't implement your evil plan if you got voted out.

I think 401K will be more drastic. Make a big enough crisis, then nationalize all 401Ks by moving everyone to a gov't retirement program. Hey, if you can make them all buy health insurance, you can surely mandate what % all those young workers pay in. And don't work mom and pops, your money is all safe right in this big vault right next to the social security vault. We just had to do this to save you from those evil banksters. 

Gov't can't stare at a cookie jar as big as 401K is and not knock it over. I just turned 40, I contribute to a 401. I will also continue to take a loan on it whenever I can and buy durable things or at least things that have value in the real world. Hence my $1200 pantry adjustment in long term food this past fall. Or the primers I lost count of, etc, etc.

[brimic]

Well, they are taxed at withdrawal. Of course the ideas have been floated to eliminate the pre-tax status of contributions, kill Roths and such. Those things by legislation are known non-starters because you can't implement your evil plan if you got voted out.

I think 401K will be more drastic. Make a big enough crisis, then nationalize all 401Ks by moving everyone to a gov't retirement program. Hey, if you can make them all buy health insurance, you can surely mandate what % all those young workers pay in. And don't work mom and pops, your money is all safe right in this big vault right next to the social security vault. We just had to do this to save you from those evil banksters. 

Gov't can't stare at a cookie jar as big as 401K is and not knock it over. I just turned 40, I contribute to a 401. I will also continue to take a loan on it whenever I can and buy durable things or at least things that have value in the real world. Hence my $1200 pantry adjustment in long term food this past fall. Or the primers I lost count of, etc, etc.

They are definately salivating over 401ks and Roths, and their hunger will only get worse. OTOH, I think its a triggering point and likely a line in the sand for a lot of people- steal a person's life's work and they have little left to care for- multiply that by millions of really pissed off (and armed) people.

[Waitone]

Hey, Boehner!  See what a little push-back can do!  All you gotta do is stand up on your hind legs and say no, and you too will win one or two.

[charby]

Yeah, Democrats have never proposed taxing 401K plans before.   

I better get a tax credit the years it under performs or loses money.

[charby]

I also wonder what the smoke screen from this bomb (tax college savings) is covering up or diverting attention from.

[cassandra and sara's daddy]

I also wonder what the smoke screen from this bomb (tax college savings) is covering up or diverting attention from.

That was my thought too


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[SADShooter]

They are definately salivating over 401ks and Roths, and their hunger will only get worse. OTOH, I think its a triggering point and likely a line in the sand for a lot of people- steal a person's life's work and they have little left to care for- multiply that by millions of really pissed off (and armed) people.

The "You didn't build that" position is evolving into "You didn't earn that" and "You don't own that". A battle between ants and grasshoppers is an unpleasant prospect, but I'm not certain it's avoidable any longer.

[RevDisk]

If they grab at 401K's, heh, whole lot of people will not be pleased at losing their life savings.

[Boomhauer]

They may not sieze them outright, but I could definitely see a higher taxation rate or taking a "small portion" of it.

[cassandra and sara's daddy]

Well slap me and call me Sally. This time boomhauer is more optimistic than I am


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[cordex]

They may not sieze them outright, but I could definitely see a higher taxation rate or taking a "small portion" of it.

Yep. As far as I see, all he was doing here was suggesting removal of the tax breaks for the 529 plans.  The same could be done of traditional and Roth 401k plans with serious impacts on the long term value of such plans but no direct confiscation.  

[Headless Thompson Gunner]

Yep. As far as I see, all he was doing here was suggesting removal of the tax breaks for the 529 plans.  The same could be done of traditional and Roth 401k plans with serious impacts on the long term value of such plans but no direct confiscation.  

And it wouldn't take a lot of spin for the politicians to convince voters that taking away retirement tax breaks is the right thing to do.  Anyone who objects can be painted as a rich selfish SOB who wants to take food out of the mouths of babies. 

[RevDisk]

Well slap me and call me Sally. This time boomhauer is more optimistic than I am

I concur with Boomhauer. Outright seizure would be illegal (not that it'd stop the feds from trying), but more importantly it'd piss off every bank, most companies and 88,705,000 voters.

Banks happen to like having about 4 trillion in assets that the owners of said assets cannot move or withdraw easily.
Companies like having 4 trillion dollars put towards purchasing their stock.
Near 90 million people are putting money towards retirement. They're probably more likely to actually be voters, but I haven't seen any statistics. Stealing money from 28% of the population won't go over well. 37% of the over-18 population. You'd really need to sell the other 63% in this case. A very large percent of that 37% would be willing to put campaign contributions and votes towards revenge candidates.

So yeah. Screwing around with the tax implications is possible, even probable. Out and out seizure? Not likely. There was significant push back against ACA/Obamacare, which was mostly screwing around with existing structures and not nationalization.

[wmenorr67]

Thing is a lot of the voters that support the left are the ones that more than likely don't have 529's or 401k's.  They could be sold on tax those or less tax breaks would mean more money to dole out to those that don't work.

[Ben]

Thing is a lot of the voters that support the left are the ones that more than likely don't have 529's or 401k's.  They could be sold on tax those or less tax breaks would mean more money to dole out to those that don't work.

Well, that's where that Romney "47%" (or whatever it was) quote gets interesting. Coastal and big city libs who make low six figure incomes (which is pretty middle class in a lot of housing markets) have mostly sided with taxing to support that 47%, which can make "tax and spend" a majority voter issue. If the Left in DC starts going too far and hitting the savings vehicles (whether it's 401Ks, 529s, health savings, etc.) that a lot of these "coastal libs" (for want of a better term) rely on, it could make things more interesting.

I notice the Obama clan has been careful over the last few years to make the lower limit of a lot of their "eat the rich" tax schemes around $500K*. I think they wouldn't have as much support at say, $200K, which is the combined income for a lot of people in larger cities and expensive housing markets, while still looked at as "rich" by not just the 47%, but by a lot of flyover country.


* Of course realizing that this "tax the wealthiest" stuff is really nonsense, since you could tax the wealthiest 1% at 100% and not make the slightest dent in the deficit and runaway spending.

[MechAg94]

Thing is a lot of the voters that support the left are the ones that more than likely don't have 529's or 401k's.  They could be sold on tax those or less tax breaks would mean more money to dole out to those that don't work.

What is more important to the Democrats in DC?  The voters who they lead around by the nose or the money guys and big businesses that feed them campaign money?  I think they have shown over and over again they care little about the actual voter. 

[Angel Eyes]

What is more important to the Democrats in DC?  The voters who they lead around by the nose or the money guys and big businesses that feed them campaign money?  I think they have shown over and over again they care little about the actual voter. 

Replace "Democrats" with "Republicans" and it's still true.