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Started By
Message
Obama wants to tax 529 Tax-Free college plans
Posted on 1/20/15 at 12:20 pm
Posted on 1/20/15 at 12:20 pm
Obama wants to tax college savings plans (529s)
If true, this is just another reason I never use a government tax law established as a savings plan.
Gubment makes the problem in high taxes.
Gubment creates a solution to the high tax with some savings law.
Wise up folks.
quote:
Tonight, in his State of the Union address, President Obama will propose a series of tax increases on the American people. One of these tax increases is indisputably an income tax hike on middle class families with children.
Under Obama’s plan, earnings in “Section 529” (named for its location in the Internal Revenue Code) college savings plans will face full income taxation upon withdrawal.
If true, this is just another reason I never use a government tax law established as a savings plan.
Gubment makes the problem in high taxes.
Gubment creates a solution to the high tax with some savings law.
Wise up folks.
7
Posted on 1/20/15 at 12:31 pm to BestBanker
They had to pay for all of this free stuff eventually.
Might as well tax us more.
Might as well tax us more.
Posted on 1/20/15 at 12:41 pm to BestBanker
quote:
BestBanker
sound like this guy
Posted on 1/20/15 at 1:27 pm to BestBanker
Just last week I posted on this board asking if anyone thought the gov'mint would try something similar with Roth IRAs.
This idea shows the administration is clueless. If this happened... in exchange for deferring the tax on earnings until it's withdrawn, you would be converting mostly 15 percent tax rate income to marginal tax rate income.
Nevermind the optics of taxing people who save money for college, to pay for free community college.
This plan won't go anywhere in Congress... but still... an interesting insight into how the left really thinks.
This idea shows the administration is clueless. If this happened... in exchange for deferring the tax on earnings until it's withdrawn, you would be converting mostly 15 percent tax rate income to marginal tax rate income.
Nevermind the optics of taxing people who save money for college, to pay for free community college.
This plan won't go anywhere in Congress... but still... an interesting insight into how the left really thinks.
Posted on 1/20/15 at 1:35 pm to LSUFanHouston
Wouldn't they be taxing it twice though?
Posted on 1/20/15 at 1:36 pm to BestBanker
I hate people.
Posted on 1/20/15 at 2:16 pm to oR33Do
quote:
Wouldn't they be taxing it twice though?
Not really...
The contributions would be taxed when earned (i.e. contributions are after-tax)
The income would be taxed when withdrawn.
Posted on 1/20/15 at 2:29 pm to LSUFanHouston
That is double taxed..
Posted on 1/20/15 at 2:29 pm to oR33Do
I would assume you would have a basis. This has no chance of actually happening.
Posted on 1/20/15 at 2:32 pm to BestBanker
Do people actually believe stuff like this? This has no chance of happening in the real world but it's great for right wing click bait.
Posted on 1/20/15 at 2:34 pm to iAmBatman
quote:
Do people actually believe stuff like this? This has no chance of happening in the real world but it's great for right wing click bait.
It won't happen because the right control the house and senate. If the left had control it certainly would pass. Obama just wants to use it to paint the right as evil for now allowing poor kids to go to community college on the backs of responsible parents.
Posted on 1/20/15 at 2:35 pm to LSUFanHouston
quote:I've always cautioned my younger clients about this. Do you think some future Congress, faced with insurmountable fiscal issues, is going to honor promises made by Congress in the past when those promises contributed to the mess the future Congress is trying to resolve? I seriously doubt that future Congress is going to tell future taxpayers they will have to pay for past borrowing, but Roth IRA beneficiaries won't despite the fact that the borrowing was done to prevent those Roth IRA owners from having to pay higher taxes in the past.
Just last week I posted on this board asking if anyone thought the gov'mint would try something similar with Roth IRAs.
Posted on 1/20/15 at 2:37 pm to tylercsbn9
It wouldn't happen if the left had a super majority. So much fail
Posted on 1/20/15 at 2:46 pm to iAmBatman
You're probably right but it's still pretty disheartening that he'd even propose something like that. It's just the next step towards more taxation, IMO (gauging the reaction of those on the right).
Posted on 1/20/15 at 2:50 pm to iAmBatman
quote:
Do people actually believe stuff like this? This has no chance of happening in the real world but it's great for right wing click bait.
Not my idea. I'm not floating these balloons. O's doing: Believe it or not.
Posted on 1/20/15 at 2:54 pm to oR33Do
quote:
That is double taxed..
Uh...
Let's say you make $50,000 in 2014. You contribute $5,000 to a 529 plan in 2014. In 2018, the plan is now worth $8,000. You withdraw the entire $8,000 to pay for the kid's college costs in 2018.
In 2018, you would be taxed on the $3,000 earnings. You already paid tax on the $5,000 you contributed - that was an after tax amount from 2014.
Only EARNINGS would be taxed at distribution, if this plan came to pass.
Under current law, the EARNINGS are never taxed if they are used for qualified educational expenses.
Posted on 1/20/15 at 2:54 pm to BestBanker
The IRS collected $3 trillion for the first time ever in 2014... Yet they were still $500 billion in debt.
There isn't a tax problem (in that enough isn't collected. There needs to be reform). There's a spending problem.
There isn't a tax problem (in that enough isn't collected. There needs to be reform). There's a spending problem.
Posted on 1/20/15 at 3:20 pm to ell_13
I wonder if the gubment creates these solutions or tax shelters for high income earners just for the purpose of attacking them later. Bait n Switch.
Posted on 1/20/15 at 3:36 pm to LSUFanHouston
quote:
Just last week I posted on this board asking if anyone thought the gov'mint would try something similar with Roth IRAs.
Roths are paid for with money that was already taxed doe.
Posted on 1/20/15 at 3:41 pm to Asgard Device
quote:
already taxed doe
Since when has that mattered
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