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Obama Wants To Reduce Tax Breaks For 529 plans

TedTed
edited January 2015 in Fund Discussions
President Barack Obama is expected to propose a major change to 529 college-savings plans--removing a tax benefit that has attracted parents to these investment vehicles for years.
The president’s State of the Union address Tuesday night is expected to include a long list of proposed tax changes. Among them: no longer allowing earnings on new contributions in 529 plans to be withdrawn tax-free.
If that became law, it would be a major revision to 529 plans, and plan experts say such a change would likely result in contributions to these plans declining substantially. “Contributions would dry up in 529 plans, “ says Joe Hurley, founder of Savingforcollege.com, which tracks 529 plans
Regards,
Ted
http://www.marketwatch.com/story/obama-wants-to-reduce-tax-breaks-for-529-plans-2015-01-20/print
A quick heads-up: this discussion was flagged. We did, indeed, seem to be getting rather more heated, and more personal, than is healthy. So, I closed the thread and deleted some of the more personal commentary. Subsequent readers might notice some disjointed remarks, many of which might simply refer back to now-deleted content.

Back to wondering whether the euro at $1.12 means I could afford to visit family in Ireland this year. It's a happy thought. David
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Comments

  • Is 11/2016 here yet???
  • Some of these tax issues have a pure leaning one way or another revolving around business or individual rates, deductions, etc.; but when I read about this regarding the 529's, I wonder who or why such a proposal would be put forth. Of what value is this to the government.
    Is this supposed to help drive the president's idea of free tuition for two years at community colleges?
    Don't get it.....
  • It won't take long for the Relublicans to talking point that and it will end up being a huge mistake for Obama.

    That's a non-starter with Republicans controlling both houses.

    Not sure why he would even try to put that out there
  • I wonder if a 67yo can go back to college for Free, and withdraw some tax free money?
    I got the time and ideas for Econ. 101 term paper....
  • @Tampabay

    Khan Academy

    One may attend for free; and contribute, too.
  • edited January 2015
    Redistribution of wealth has never worked, and will never help the poor escape poverty. And nobody -- whether liberal, independent or conservative -- is amenable to having the government forcibly redistribute their personal wealth to somebody with less wealth, of course after the government takes their cut of the transaction, thereby making it a very inefficient transfer of wealth.

    I agree with the maxims of Rev. William John Henry Boetcker originally published in 1916:

    • You cannot bring about prosperity by discouraging thrift.
    • You cannot strengthen the weak by weakening the strong.
    • You cannot help little men by tearing down big men.
    • You cannot lift the wage earner by pulling down the wage payer.
    • You cannot help the poor by destroying the rich.
    • You cannot establish sound security on borrowed money.
    • You cannot further the brotherhood of man by inciting class hatred.
    • You cannot keep out of trouble by spending more than you earn.
    • You cannot build character and courage by destroying men's initiative and independence.
    • You cannot help men permanently by doing for them what they can and should do for themselves.

    Margaret Thatcher and Ronald Reagan had the same thoughts about wealth redistribution. Here is a classic Margaret Thatcher moment:



    Kevin
  • Exactly @kevindow. Thanks for posting that.
  • Three cheers for the Iron Lady !
    Regards,
    Ted
  • @Ted
    Thank you for putting this subject forward here.
    I get tired of "notes" to our Senators/Reps about various topics; but this is a good one to discover what type of response I receive as to why such a proposal would find its way into the conversation regarding "tax fairness" and "helping the middle class". An "out of touch" proposal. One would suspect that this is tied in with the "free" two years of community college proposal. Take the tax dollars from 529 distributions to offset the free college, eh?
    Ah, the games (D.C.) make me feel like I am going to puke.

    Take care of you and yours,
    Catch
  • "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy."

    Prepare your family.

    The Life Cycles of Empires: Lessons for America Today?
    http://www.ucg.org/united-states/life-cycles-empires-lessons-america-today/
  • From past commentary by Mike M, I would be very surprised if his "GI" comment was not meant sarcastically, especially given the highly dubious proposition that "Poor people can escape Poverty in the U.S........ ANYTIME they WANT TO"

    tb's remarks are interesting to me because of the rather unpredictable mix of reasonable and logical commentary with obvious absurdities such as the above quote.
  • MikeM
    I am a Vietnam war veteran. I was called to duty and served 1965-1966. I had 2 small children at that time. I was with a group that was stationed in a( Mash) Evacuation Hospital. I saw a lot of sacrifice that the men and women serving their country made.
    Many did not come home. Those who were lucky enough to return like myself were able to take advantage of G.I. Benefits. For myself ,I was able to become a physician.

    MikeM I am disappointed in your comments. Why don't you tell us all what you have done for our country.
    prinx
  • Given the fact that investors basically doubled their money in the stock market under Obama and lost about half of it under Bush, I wonder why there is all this hatred directed at him on a mutual fund discussion board. If someone says race, the haters immediately say emphatically, "It has nothing to do with race!" But then what exactly is it? The deficit? Well, the deficit grew pretty big under Bush too. The wars? Well, he didn't start them. The potential after six gravy years for a tax increase? Well, Bush 1 and even Reagan ultimately raised taxes after a while. So what exactly is it? The mere fact he's a Democrat or something else?
  • I too believe that Mike was speaking sarcastically and also as a Vietnam vet who shamelessly took part in those afforded benefits I emphatically agree with everything in his original message.

    As a single dad I was able to make it while being dirt poor (although msf and another poster doubt me). My ex, I'm sure could not have made it without tapping the safety system. Does that mean she's a lazy, unmotivated dirtbag? She is, but for different reasons. Our president couldn't even get republican agreement when he spoke last night about equal pay for women. Their hands must have been cold.

    @Lewis - stop trying to confuse the right with the facts.
    @TB - If you're serious about improving someone by giving then volunteering is a concept you should explore. I've seen it lift many.
  • edited January 2015
    Easy guys.

    @MikeM was defending government programs by taking a post to its eventual conclusion.

    I am 100% certain from his comment he supports continued Veteran's benefits and would cite the GI Bill as a staggering success.

    Given the fact that investors basically doubled their money in the stock market under Obama and lost about half of it under Bush, I wonder why there is all this hatred directed at him on a mutual fund discussion board. If someone says race, the haters immediately say emphatically, "It has nothing to do with race!" But then what exactly is it? The deficit? Well, the deficit grew pretty big under Bush too. The wars? Well, he didn't start them. The potential after six gravy years for a tax increase? Well, Bush 1 and even Reagan ultimately raised taxes after a while. So what exactly is it? The mere fact he's a Democrat or something else?

    Cable news's institutional need to replace reportage with ideologically based opinion and misinformation, the nature of the internet as an echo chamber, and the resulting inability of the American citizenry to have anything resembling a civil or nuanced conversation?

    Activist hat, off.

    Edit: Probably more snark than necessary on my part. By and large people here actually are very well informed and have some decent discussions. I do think the discourse in America is terribly low as a society, however.
  • I am really disappointed in the majority of posts on this thread which seem to emphasize heat rather than light. I suggest reviewing your comments before posting. .
  • Some people are living in a fantasy world.

    Here are a few of the mere facts.

    It's the dollar based on nothing but a promise. It's easy to inflate the value of stocks. What is your value of stocks in the terms of 1960 dollars? I bet you lost you're ass - compliments of your politicians. It's the social security lock box. Its Dian Feinstein's statement that "we don't know what is in Obama care bill till it becomes law". It's the promises politicians have made to get elected. It's the deadbeats in this country that think the world owes them a living. It's the insurance companies that get in between you and your doctor. It's the credit card companies that get in between you money and what you purchase. Its the lack of tort reform that is bringing every industry to their financial knees. Its the pension system that will be worthless when you come to need it. Its the increasing taxes that are based on false promises. I don't see any distinction between any of the modern political parties. Politicians would go broke if they had to work for a living. It's a travesty to create debt that your grand children will be saddled with

    In terms of 1960 dollars and lifestyle we have all lost our ass !!

    Do I dare say more
  • Warning ...

    image
  • Obviously sarcasm does not translate well through posts. My father fought in WW2. He came home and bought a house using benefits from the GI bill. It helped him start our family. My brother served in Viet Nam and also deservedly used his GI benefits. He died recently, from what doctors say was likely a result of being exposed to agent-orange during that long-ago war. His wife now gets a veterans-aid survivor benefit. She would rather have her husband. I believe all veterans deserve as much help in transitioning back to civilian life and as much admiration as can be given.

    So my words were absolutely sarcasm. I was trying to make a point on Tampa Bays statement "I have never seen one human being IMPROVE himself by giving him something, esp. money". Some times people need help. The GI bill is the best example to refute TB's statement. It not only improved their lives, but it improved the prosperity and helped build the middle class of this country. Build an educated work force by allowing deserving people free education - the GI Bill. Why not now? Build an educated work force to help rebuild the middle class. That was my argument that fell through the cracks.

    I'm truly sorry that I offended, especially the veterans on this board.
  • @Gary said it all. If I can add to that;

    Some people decide to take action on their own, investing for their future, and becoming more independent. As their assets grow, the government decides they have put away too much and it's not fair to the others. More taxes and changed regulations hamper attempts for anyone trying to do the same.

    As someone probably said; I didn't know I was rich until the government told me so.
  • I know I am rich --- comparatively --- without anyone telling me. And glad of it, best country in the world. Not sayin' much, many days.

    Gary's mere facts are lolz fantastic, so weird. 1960. Whoa.

    +1, and more, to LewisB. Keep at it, dude, seriously.
  • MikeM said:



    I'm truly sorry that I offended, especially the veterans on this board.

    You drove down a long road for not much of a destination. The Vets EARNED their benefits. It wasn't 'given' to them.
  • Dex, he'as already explained what should have been obvious in the first place, and sincerely apologized for it, so at ease.
  • You drove down a long road for not much of a destination. The Vets EARNED their benefits. It wasn't 'given' to them.
    Dex, you may not like what I said, but using the GI Bill as an example is spot on to what I was trying to portray. Good government sponsored programs can lift individuals and benefit the individual, the economy and the country. The GI Bill proves it. Earned or not is not the issue I'm making. Deserved or not is not the issue. You an others are making it the issue. Vets earned it? Yes, I agree. How else can I say that.

    But lets get back to my point. Would an educated work force be beneficial to growing the middle class today? Yes or no? If the answer is yes like I believe, then lets go back to the start of my road as you put it.
    I have never seen a human being improve himself by giving him something...
    That's what TB said and that is unequivocally not true.

    So, answer the questions and I'm done. Would an educated work force be beneficial to growing the middle class today? Would benefiting the middle class be good for America? ...If you could only get over the "earned" thing. That is your issue.
  • Dex
    edited January 2015
    MikeM said:



    But lets get back to my point. Would an educated work force be beneficial to growing the middle class today? Yes or no? If the answer is yes like I believe, then lets go back to the start of my road as you put it.

    That is like saying is food good for people. (Not if it is McDonalds every day.
    Beneficial is a subjective term.) Just like food, all education is not good, especially when you take into account that the USA has$1T of student loans on its books.

    Education is like the housing bubble:
    Both were touted as a positive by Gov't, housing/Education industry and Wall Street.
    Since the 1930s Gov't has provided programs to help housing in the hope it would help the economy.
    Gov't has many programs for both.
    Wall street makes money on both.
    Housing or the Education system makes money

    Yet in the housing bubble busting many buyers and bond holders lost money.

    The current education bubble has not burst yet. But, many students are saddled with huge debts.

    Many might attempt to praise education for success. But, that is like driving a car by only looking in the rear view mirror.

    The Vets earned their benefits. It is in no way similar to the gov't and other programs associated with housing or education.

    May be if parents had to write out a monthly check (instead of property taxes) for pre college schooling it would be better and client/student focused. Now education is there for the benefit of the Educational Industrial Complex (thank you Eisenhower).
  • Hey, Tech guys.
    We need a sarcasm font!
  • edited January 2015
    For lack of a better idea at the moment:

    (Sarc)
  • Adding "he said sarcastically" gets the point across, too. Mike got a pretty bad rap because he isn't usually sarcastic. Now after all these years you-all expect me to be sarcastic, so I don't get in all that much trouble.
  • Dex said:



    Education is like the housing bubble:
    Both were touted as a positive by Gov't, housing/Education industry and Wall Street.
    Since the 1930s Gov't has provided programs to help housing in the hope it would help the economy.
    Gov't has many programs for both.
    Wall street makes money on both.
    Housing or the Education system makes money

    Yet in the housing bubble busting many buyers and bond holders lost money.

    The current education bubble has not burst yet. But, many students are saddled with huge debts.

    Many might attempt to praise education for success. But, that is like driving a car by only looking in the rear view mirror.

    The Vets earned their benefits. It is in no way similar to the gov't and other programs associated with housing or education.

    May be if parents had to write out a monthly check (instead of property taxes) for pre college schooling it would be better and client/student focused. Now education is there for the benefit of the Educational Industrial Complex (thank you Eisenhower).

    Well Dex, you just explained why 529 and ALL federal programs for college should be scrapped. All it is doing is increasing the price of college. The only way colleges are able to raise prices at 3 times price of inflation is getting gullible people like me to spend every penny on 529,etc. Without 529s, loans ,etc, colleges would have to innovate. Most people who have gone to UC schools could have met at conference rooms in Holiday Inn and received the same education. Pay the professors directly, cut out the middle man??

    Today, the GI Bill is completely abused by the for profit colleges that provide minimal education or job opportunities. Why are the prices for these for profit colleges so darn high. Because of the GI Bill and Gov't subsidized loans that can't be written off in bankruptcy. Instead of encouraging community colleges and state schools, the military allows the for profit college to sucker punch the enlisted as well as the taxpayers.

    Listen to a director of military education programs for a not-for-profit, private college:

    "Providing $100 gift cards to government employees as a “thank you” for inviting the college they represent to an education fair should only be defended in a judicial court. Enrolling traumatic brain injury-wounded warriors into an online program without providing necessary support for that wounded warrior to even have a chance of success, in my opinion, borders on the criminal as well. Dismal completion rates, poor job placement of the few graduates who make it through the college, maximum student loan debt ratios and repeated Department of Education fines for everything from outright Pell Grant fraud to nefarious recruitment practices leaves little to defend; however, it would behoove all institutions to look critically at what for-profit colleges are doing right, before dismissing them altogether."

    http://www.military.com/education/finding-a-school/in-defense-of-for-profit-colleges.html

    Sorry, it is just too rife for abuse, must be shut down.

    Like the saying that variable annuities are sold not bought, so too are these for profit schools.
  • equalizer said:


    Like the saying that variable annuities are sold not bought, so too are these for profit schools.

    It isn't just for profit schools. When the Gov't talks about education it never talks about containing costs or the quality of the education.

    Just like housing - location is important - Harvard Vs Palooka U.

    Just like housing - there are interest groups lobbying Gov't but no one does it for the students.

    One of the reasons college is pushed/needed is because the schooling prior to it can be poor and has not changed/adapted.

    Another factor is that businesses no longer have apprentice jobs.

    I am extremely lucky. I was able to pay for college working minimum wage jobs and no loans. Today that college is $60,000+/year.
This discussion has been closed.