s/o petition to stop 529 tax

[iaam]

Also want to thank the OP for the linking to the petition, which I signed. The link took me directly to it.

[arivecchi]

I agree with this. the carried interest loophole is also beyond ridiculous. And nothing Obama proposes will be passed by this a Congress.

Why not attack that then? Because Obama has little spine is the answer. If you truly want to "address inequality" getting rid of an incentive for college savings is not the obvious vehicle. It is such a dumb political move that it furthers my complete disappointment in this administration.

The truth is, if a person is making a quarter of a million dollars, they are rich. Full stop. At 250, that person makes more than 95% of the people in this county. It doesn't matter if one has loans or wants to send their kids to a private college or hasn't yet saved for retirement. There are millions upon millions of people in this country who can't even begin to hope to do any of that stuff because even though they work hard, they don't make enough to pay their current bills, let alone worry about the future.

I understand the feeling that however much money one happens to have is "not rich" and that the truly rich people are some mythical other. DH honestly believes we're middle class, though we fit into the top 10%, income wise. And of course it's human nature to want to keep all of the things we feel we've earned. But the government cannot and should not allow people's subjective definitions of "rich" dictate policy. I think reinstating the tax on 529 money is a good idea.

See my comment above. I don't understand the knee jerk response to approve of everything one's party does without critically thinking about it. What will this accomplish in the grand scheme of things besides Ds shooting themselves in the foot and - if it passes - discouraging college savings?

Judgmental, yes. But not harsh. I think that society has an obligation to help those that most need it, not to subsidize the lifestyles of those who are already financially comfortable. And accomplishing the former means abolishing giveaways to the latter, then I'm on board.

I think giving away nearly half your income already fulfills that obligation.

I agree completely. I wil go further and say that the "class wars" that Obama has started are nothing but counterproductive and will not solve any issues. I believe that there are issues to be solved with respect to income inequality, but that's going to take a lot more work and real reform, which no one seems to want to do. In my opinion, he is propagating the rich = evil sentiment and I am personally sick of it.

This is the bottomline. It is political pandering at its worst. Yet Obama has not attacked any of the real issues that needed to be addressed - such as immigration reform and gun control. He is just a huge disappointment as a president. There is no backbone.

[squimp]

Super harsh, imo, too. We're in the unicorn 1%, like many others on this board, but we're way at the bottom. I shop at Target, Old Navy, etc. Our home isn't a mansion, I drive a minivan and my husband drives a Hyundai. DH Works very hard for his money, and makes his company tons. He gets paid accordingly. We have 4 kids to put through college, and we knew what we were getting into when we decided to have that many children. I vote democrat, but it's more for social issues.

I get sick of what I see as pandering, when the over-taxing the demonized 1% is held up as the solution to any issue. It's not going to hurt the truly rich, they're hiding assets and working around tax codes. It only is going to hit families like mine, who happen to have made a success of themselves. Even though both sets of our parents didn't go to college. Pull yourselves up by your bootstraps, but not too high. Or we're going to take it all away from you. I know other families work just as hard, and don't make nearly as much as mine. I get that, but the solution isn't simply slapping on more taxes.

What is your tax rate? Just curious what overtaxing is.

[sariana]

Hmm, we shall see. France learned the hard way what happens when the rich get richer and the poor get angry.

The highest tax rate used to be 90% or so. What is "too high" these days?

I don't like the idea of taxing 529 plans. But I'm no economist, and I don't know from a global perspective what the best solution is. I do think it can be helpful sometimes to throw everything into the ring and battle it out. Having the debate sometimes clarifies the issues. So have at it, and see what shakes out.

I do think there is a HUGE problem regarding the accumulation and passing along of wealth. People should be able to reap what they earn, but should their earnings be forever sheltered for their heirs, who did nothing to earn it? And at the expense of others?

[indigo99]

I hadn't even heard about the community college bill, but I think it's a step in the right direction. DH is from a country with very high taxes, but they have universal healthcare, paid maternity and paternity leave, free childcare, and all kids can go to college. Teachers, trash collectors, attorneys, and doctors can all be found living in the same neighborhood. I'm sure that there are super wealthy people, but overall it seems a lot more fair than what we have here. Of course they all complain about the high taxes, but it is a more even playing field. I do think it can be nearly impossible for people to pull themselves out of poverty in this country.

[anonomom]

Why not attack that then? Because Obama has little spine is the answer. If you truly want to "address inequality" getting rid of an incentive for college savings is not the obvious vehicle. It is such a dumb political move that it furthers my complete disappointment in this administration.

See my comment above. I don't understand the knee jerk response to approve of everything one's party does without critically thinking about it. What will this accomplish in the grand scheme of things besides Ds shooting themselves in the foot and - if it passes - discouraging college savings?

I think giving away nearly half your income already fulfills that obligation. I'm guessing you don't?

This is the bottomline. It is political pandering at its worst. Yet Obama has not attacked any of the real issues that needed to be addressed - such as immigration reform and gun control. He is just a huge disappointment as a president. There is no backbone.

I'm not sure why you'd assume my opinion is "knee-jerk" and lacking in critical thought just because it happens to differ from yours. Similarly, not sure where you're getting the idea that the "not actually rich" income level discussed in this thread gives away "nearly half" its income. The tax rate for the income level that's been discussed in this thread is 28%, before any deductions and/or credits apply. I guess you can add in state taxes, property taxes and sales taxes, but those affect everyone regardless of income so they aren't terribly relevant.

Since people think I've gone too personal in this thread, so I'll speak of my own situation. DH makes enough money to be in that 28% bracket. We have three kids, all of whom we'd like to put through college. I worked full time through undergrad and law school, but still ended up with six figures in loans that we're still paying off. We have a mortgage, pay preschool tuition and are putting as much money away for college and retirement as we can.

We are rich. Not "private jet, designer clothes, trust fund" rich, but rich nonetheless. We go to bed every night with full bellies, confident that for the foreseeable future we will have enough food to eat. We wake up in a warm home, send our kids to safe and adequate public schools, and our biggest crime fear is the random burglaries that are currently happening in town. We know that our kids will have the choice of some form of college education, likely at a four year school, possibly even a private one. We know that if DH loses his job, we have a comfortable safety net put away, and that I could go back to work too. Whether we put our kids into activities is a choice we make based on time and interest, not on money. We can afford school supplies and plenty of warm, comfortable clothes for our kids. We have enough to meet all of our needs and many of our wants. We are rich.

That doesn't mean paying for three college tuitions will be fun. It will certainly require sacrifice on our parts, but we have tons of choices. Our kids can start at a two-year college. DH and I can defer retirement for a few years. The kids can get jobs and earn part of their way. We can, if necessary, borrow against our home to pay that bill. The repeal of the tax break for 529 plans doesn't put college out of reach for my kids, but the money it nets the government could be used to put college in reach of kids who don't come from rich families. I just don't see the "class warfare" in that.

[Kindra178]

I'm not sure why you'd assume my opinion is "knee-jerk" and lacking in critical thought just because it happens to differ from yours. Similarly, not sure where you're getting the idea that the "not actually rich" income level discussed in this thread gives away "nearly half" its income. The tax rate for the income level that's been discussed in this thread is 28%, before any deductions and/or credits apply. I guess you can add in state taxes, property taxes and sales taxes, but those affect everyone regardless of income so they aren't terribly relevant.

Since people think I've gone too personal in this thread, so I'll speak of my own situation. DH makes enough money to be in that 28% bracket. We have three kids, all of whom we'd like to put through college. I worked full time through undergrad and law school, but still ended up with six figures in loans that we're still paying off. We have a mortgage, pay preschool tuition and are putting as much money away for college and retirement as we can.

We are rich. Not "private jet, designer clothes, trust fund" rich, but rich nonetheless. We go to bed every night with full bellies, confident that for the foreseeable future we will have enough food to eat. We wake up in a warm home, send our kids to safe and adequate public schools, and our biggest crime fear is the random burglaries that are currently happening in town. We know that our kids will have the choice of some form of college education, likely at a four year school, possibly even a private one. We know that if DH loses his job, we have a comfortable safety net put away, and that I could go back to work too. Whether we put our kids into activities is a choice we make based on time and interest, not on money. We can afford school supplies and plenty of warm, comfortable clothes for our kids. We have enough to meet all of our needs and many of our wants. We are rich.

That doesn't mean paying for three college tuitions will be fun. It will certainly require sacrifice on our parts, but we have tons of choices. Our kids can start at a two-year college. DH and I can defer retirement for a few years. The kids can get jobs and earn part of their way. We can, if necessary, borrow against our home to pay that bill. The repeal of the tax break for 529 plans doesn't put college out of reach for my kids, but the money it nets the government could be used to put college in reach of kids who don't come from rich families. I just don't see the "class warfare" in that.

While I generally agree with you politically, I certainly can't get on board with your last two paragraphs. Having food, clothes and a warm house does not equal rich. That's adequate or meeting the basics, right? The money put in a 529 is already taxed, before you put the money in.

All that said, there is no way this will pass.

[iaam]

Slightly separate issue, but still related: the discussion around college, especially with the proposal that community college be free, makes me think that we need to re-evaluate the purpose of a college education and how best to ensure that we get the intended value. Rather than community colleges, where the professors and education are farily mediocre, I think it makes more sense to expand the use of digitial education. Wouldn't you rather hear a lecture from a Stanford professor than Joe-the-Community-College lecturer? With today's technology platform, you can do that. If that makes sense, then the next thing we need to solve for is how to build the community - the working teams, the 'campus' network, etc. I don't have a solution but I know we can come up with something. I would be perfectly fine paying (through my taxes) for something like that. However, to make community college free without evaluating its role in today's America doesn't make sense to me.

[Reader]

it's pretty depressing honestly. i can't bring myself to vote for a republican, but i'm really struggling to support this administration right now

Right there with you.

[iaam]

While I generally agree with you politically, I certainly can't get on board with your last two paragraphs. Having food, clothes and a warm house does not equal rich. That's adequate or meeting the basics, right? The money put in a 529 is already taxed, before you put the money in.

All that said, there is no way this will pass.

Agree! And yes, I will rest easy knowing that it will not pass.