@MidwestDad3 "MR should WANT to help, because it is the right thing to do. "
@donnaleighg “‘robbing the rich’ to help kids go to college is what the vast majority of developed countries do.”
It’s hard to know where to start to respond to this kind of content-free argument, but briefly: Maybe the rich should want to do something, or maybe they shouldn’t; maybe that something is the right thing, or maybe it’s not; the commenter clearly wants them to want what he wants and thinks that what he wants is right; but putting a gun to the head of the rich, which is what taxation is, to get them to do what you want strikes me as tyrannical. What you want may be “the right thing to do” in one sense but it’s a very different kind of “right” than saying that paving roads and maintaining aircraft carriers are “the right thing to do.”
More concisely: don’t tell me what is “right” as though I need to live by your morality, unless you’re prepared to live by mine. I suspect that the commenter applies that principle in several other areas where people disagree on policy.
As for what other developed countries do, even the majority, so what? Different societies have different priorities and majorities of other countries don’t determine policy for the rest. Very many developed countries - maybe the majority, I don’t know - have hate speech and anti-Holocaust denial laws, state-established religions, and much more that is antithetical to American values. Good for them, but it tells us nothing about what we should do.
As for @MiddKid86 “wealthier taxpayers taking unnecessary advantage” - what does “unnecessary” mean? They don’t need the money? Who the heck are you to decide that?
Thank you for your editing. 
As far as what I mean by “unnecessary” - Bill Gates does not need a 529 plan to help him afford a college education for his children, and yet he is entitled to use one, and enjoy the tax-free growth of the earnings in a 529 account if those earnings are used for QEE. Who am I to decide? Somebody has to make tax law and policy, and in the process determine who gets taxed how and who is eligible for what tax breaks and benefits. Since as a voter I have a part in choosing who those somebodies are, I do get to decide, albeit in a very small way.
Well, a 529 plan as currently constituted will certainly help even Bill Gates afford the tuition. If you have two vendors at a fair side by side, one selling Coke for $1 and the other one for 75 cents, which will you buy? I don’t doubt you can afford the extra quarter, but you probably believe you can better decide how to use that quarter than Mr. $1 Vendor. Whether Gates “needs” the 529 plan to do so is a separate question, one to which I don’t think you are qualified to decide the answer. You (as one of millions of represented voters) do in fact get to decide whether Gates will get the benefit of the plan, and Congress may well put an income limit on that as it does with lots of other programs, but justifying that in terms of “need” for the money is the mark of a way of thinking that has done incalculable harm in the last 100 years.
Who is qualified?
It’s a policy decision, thousands of which are made every day. It’s done by consensus as part of the representative democracy process.
" Who is qualified? " --only Gates. You and others get to decide whether he gets the plan, but only he gets to decide if he needs it. Don’t tell me what I need, because you probably won’t like what I tell you you don’t need.
Gotcha. I strongly suspect that if you asked Bill Gates if he “needed” the tax advantage of a 529 plan to be able to afford college for his kids, he would say no. After he stopped laughing.
And if Congress sets an income limit on 529 plans that disqualifies Gates from having one, they can tell him that it’s not based on whether he needs to use one or not (after all, they’re not “qualified” to determine that), it’s based on… something else.
You all are getting hung up on need or lack of need. We don’t only get what someone else decides we need. That would be awful. The whole point is to try to achieve as much as possible otherwise we just all stay home today since basic needs are probably met either way. lol.
@requin I’m not telling you what you need and I’m not asking you to live by my morality. The voting citizens of this country elect Congress; Congress makes the rules. Anyone is entitled to take full advantage of the rules that Congress makes.
“putting a gun to the head of the rich, which is what taxation is” - No, I just don’t accept that.
The Congress that we elect levies taxes in order to enable this country to function. You want to be safe? We need a military. Someone has to pay for that. You want to have an economy that works, we need a mint. Someone has to pay for that. You want to drive to work, you need a road. If someone really doesn’t want to pay taxes, then they should move to Yemen. But don’t denigrate the citizens who are trying to discuss how tax policy should be changed, or eliminated, or improved, or whatever. Engagement, civility . . . these things are really important.
I won’t back down from my opinion that MR indeed should “want” to help. No one, NO ONE, benefits from a better educated work force than him. Better educated workers enable his companies to function. Better educated workers making more money will pay more taxes, thus subsidizing the huge benefits he and others receive by holding huge 401Ks. This is my opinion. I’m merely expressing it, not trying to force it on you. You and anyone else is free to agree or disagree.
(Post 81) Taxation is “putting a gun to the head of the rich”??
SMH
“a way of thinking that has done incalculable harm in the last 100 years.”
Well, if such political statements are allowed to stand here, many of us can think of some ways of thinking and policies that have done incalculable harm over the past 34 years or so.
I haven’t read this whole thread but an article in today’s Washington Post mentions another bad side of the president’s proposal.
Not only would the earnings be taxed, but the earnings would be attributable to the student’s income. This would make it much harder for those students to get need based financial aid. By the time those two things are factored in, any gains earned by saving through a 529 plan could be wiped out.
The plan seems to be to push middle class students away from quality universities and into community colleges which would be ‘free’. And this is supposed to help the middle class?
@MidwestDad3 and a number of other posters said it better than I could (or will), so forgive my chiming in…
But like them, I refute the “gun to the head” analogy that a certain political philosophy continually asserts. Taxation can not be considered theft by a properly elected representative government. Let’s put aside, for now, the question of whether ours is properly elected, and just for argument’s sake, agree that it is.
In such a society, taxation is mutually agreed on costs of being a member of society. You may not like the toll on the toll bridge, but it’s not theft when the guard requires you to pay it. And it’s not violence if he pulls out a gun to prevent you from crossing without paying.
And before one tries to assert that the bridge is a “service,” but society isn’t… change the toll bridge in the analogy to a country club. Every member is entitled to argue what the membership fees should be, but when the dues are set, it’s every members obligation to pay. The only theft that occurs is when a member refuses to pay their dues while still taking advantage of the club.
I won’t get into who should want what, because I honestly believe that most people who voice an opinion, do so from sound, logical, well-intentioned principles. There are always as many opinions as there are opinion-givers… and usually more. Short of a burning bush, the only reasonable arbitrator can be collective agreement. If that’s tyranny of the masses, well I think that history has shown that to be less risky to societal well-being than the tyranny of the few.
just my two cents, anyway.
@khidhala: It is certainly violence in your scenario, or at least the threat of violence, or at least coercion. It is not illegal or unlawful violence or coercion though. Violence is violence, but in this world we do make a distinction beween allowable/legal and not allowable/extra-legal forms of violence.
Sorry to be pedantic and I will put away my red marker now.
I agree with your points, btw, just wanted to clarify.
@TatinG , by attributing the income to the student rather than the parent, the effect would actually be lessened in most cases.
Students tend to earn less than parents, so are likely to be in a lower tax bracket, or perhaps even exempt. Further, students automatically get the first $6260 of their income protected in calculating ERC. Parents only get the first $4000 protected.
My math is a little rusty, but unless the capital gains shown on the 529 exceed $17,500, the student comes out better having the gains on their FAFSA and tax forms.
@BobcatPhoenix , I accept your pedantry with glee! Just be sure to put the cap on the red marker before you put it away. I hate when they dry out…
@midwestdad3, many moons ago on this thread you brought up the advantage of the Private College 529 plan because it uses today’s deposited dollars to buy tuition certificates anywhere from 3-30 years down the road at the price tuition cost the year the money was deposited. With tuition increasing approximately 2-5% or more every year this seems like a really attractive spin on the 529, especially when you can change the beneficiary or roll it into a regular 529 if the student goes to college outside of the 270 participating (private) schools. I am impressed with the breadth of schools available- a variety of LACs, bigger universities, STEM schools, even Christian colleges. Seems like a very sensible option to me, and there isn’t as much riding on the tax benefit side of things if the 529 tax break disappears because the break you receive is in tuition dollars. So is the main downside simply that a student misses the greatest benefit if the student does not attend one of the 270 schools? Have you come across any other notable downsides?
@lr4550 Yes, I think the main downside is if one’s S or D attends a school outside the plan. In that case there are several different options, including transferring the plan to another child. If you elect a refund, the amount you get back will be your contributions plus interest of up to 2% annually or a deduction of up to 2% per year, depending on how the plan performed. The FAQ section on the Private College 529 website covers it all clearly.
An additional downside is that you don’t get the state income tax break that some state 529s offer, because this plan is sponsored by the consortium of colleges, and not a particular state.
The tuition credits purchased can only be used for tuition and fees, so other arrangements must be made to save for room & board.
We have been fortunate that D’s first, second, third & fourth choice schools are all within the plan.
The Washington Post article (which I can no longer read having gone over my limit for the month without subscribing) said something different. It said that the attributing the income to the student which is assessed at 30 some percent for EFC versus 5% for the parents, would lower the likely need based financial aid for that student.
Re: #94
It appears families like ours, single income of around 70-75K family of 5 with two in college next year presumably, who do have small 529 accounts, aren’t feeling the love from our president.