I've seen a couple of brief mentions in posts, but no real discussion.
For those who don't know, Obama is proposing to tax earnings on contributions to 529 accounts (the ones parents can set up for their children, to save for college expenses.) Today, 529 accounts are funded with after-tax dollars, but the earnings accumulate tax-free, and do not incur taxes upon withdrawal as long as they are used to pay for eligible education expenses.
According to the administration, 529s are overwhelmingly used by the wealthy, and so this is just a tax haven for them. So they want to start taxing earnings on contributions made after this proposal goes into effect (assuming it could pass Congress) and use this money to help pay for free community college and other education proposals.
I'm bummed about this (though not too much, because I can't imagine the Republicans allowing it through the legislature) because it punishes those responsible enough to save for the astronomical cost of college education. I finally paid off my last student loan in my mid-40s, and I'm now trying to put enough away to pay for public university for my kids! But if this proposal gets through, they've just made my costs higher by many thousands of dollars.
For those who don't know, Obama is proposing to tax earnings on contributions to 529 accounts (the ones parents can set up for their children, to save for college expenses.) Today, 529 accounts are funded with after-tax dollars, but the earnings accumulate tax-free, and do not incur taxes upon withdrawal as long as they are used to pay for eligible education expenses.
According to the administration, 529s are overwhelmingly used by the wealthy, and so this is just a tax haven for them. So they want to start taxing earnings on contributions made after this proposal goes into effect (assuming it could pass Congress) and use this money to help pay for free community college and other education proposals.
I'm bummed about this (though not too much, because I can't imagine the Republicans allowing it through the legislature) because it punishes those responsible enough to save for the astronomical cost of college education. I finally paid off my last student loan in my mid-40s, and I'm now trying to put enough away to pay for public university for my kids! But if this proposal gets through, they've just made my costs higher by many thousands of dollars.
Anybody else ticked about Obama's 529 proposal?
0 commentaires:
Enregistrer un commentaire