Earlier in the week, I discussed the Obama administration's proposal to tax earnings on so-called 529 college savings plans, part of a package of tax hikes that will pay for new programs such as his proposal to make the first two years of community college free. This has been touted as a plan to hike taxes on the rich to help the middle class, but in fact it's more of a plan to redistribute money from the upper middle class to the lower middle class.I'm interested in hearing someone, especially a leftie, defend this proposal. There was a deal made with people when they set aside money for their kids' education using 529's, and this situation reminds me too much of this statement from Star Wars: The Empire Strikes Back:
As I noted then, this proposal is not going anywhere, not just because Republican congressmen will block it, but because it would be very unpopular with affluent blue-state voters who currently vote for Democrats. About the only people I saw defending this particular idea were blue-state singles who haven't yet confronted the monstrous expense of shepherding their progeny into the new mandarin class to which they belong.
Everyone else seems to be somewhere between confused and aghast. One comment in particular struck me, as I saw it several times on social media and in writings: "How would you feel if they did this to Roth IRAs?"
Why did I find that particular question a compelling topic for a column? Because it's a question we may have to ask ourselves.
Sunday, January 25, 2015
Any Of You Liberals Want To Justify This?
After telling people to save for their children's education, the government--in the person of President Obama himself--wants to start taxing those supposedly tax-free education savings accounts:
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This raises a lot of important issues about tax law. I have long been a proponent of a truly progressive income tax, with no easily attainable loopholes … people know what they pay, the rich get hit progressively more than the poor, but you can adjust that however you like.
The problem is? All of the established loopholes cannot be fairly eliminated. If you followed the rules for setting up a Roth, you should be able to keep those rules. Period. ;) Just try taking away the mortgage interest deduction, the greets t benefit to the middle class… completely unfair, but when you bought your house, you factored that in to your purchase decision. You can't just say -- no more. You want to see another housing market crash? Just go ahead and do it. All of these things need to be phased in over at least a generation … but government won't do it, because the fewer types of taxes you pay, and the fewer loopholes, and the more transparent? The more likely you are to be completely livid over what they are taking.
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