Barack Obama

Obama Gives Up on Trying to Kill College Savings Plans

Clear political miscalculation

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Obama
President Obama

President Obama's disastrous foray into trying to destroy "529" college savings plans unravelled Tuesday. A bipartisan consensus—including Speaker of the House John Boehner and Minority Leader Nancy Pellosi—persuaded the president to drop the matter, according to The New York Times:

Ms. Pelosi pressed the case to senior administration officials on board Air Force One as she flew with the president from India to Saudi Arabia, according to Democratic aides familiar with the discussions.

"Given it has become such a distraction, we're not going to ask Congress to pass the 529 provision so that they can instead focus on delivering a larger package of education tax relief that has bipartisan support, as well as the President's broader package of tax relief for child care and working families," a White House official said.

The official added that Mr. Obama's proposed increase in the capital gains tax rate and change to the taxation of inherited wealth would be more than enough money to fund the tax plan.

Obama had originally proposed closing the tax "loophole"—which allows middle class families to set aside money for their kids' college funds in tax-free accounts—in order to help pay for his free community college plan. Reason editor Nick Gillespie criticized the move:

[President Obama is] always talking about going after the Thurston Howells and Richie Riches of the world. But when it rains on the wealthy, the middle class get soaked, because they ultimately have the sorts of assets and savings that can actually be taxed en masse.

As obvious an example of robbing Peter to pay Paul as they come, the effort was a clear political miscalculation on the part of the White House.

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  1. “Given it has become such a distraction,”…

    You misspelled “embarrassment”.

  2. A bipartisan consensus?including Speaker of the House John Boehner and Minority Leader Nancy Pellosi?persuaded the president to drop the matter, according to The New York Times

    But… he promised!

    1. “Let me be clear…”

  3. “…focus on delivering a larger package of education tax relief…. the President’s broader package of tax relief….

    …… Mr. Obama’s proposed increase in the capital gains tax rate and change to the taxation of inherited wealth……

    Obama had originally proposed closing the tax “loophole”?which allows middle class families to set aside money for their kids’ college funds in tax-free accounts…”

    My head hurts from trying to follow the misdirection of a prog.

    1. It’s a program designed specifically to allow people to set aside pre-tax income as college savings. In other words, a loophole.

      1. 529 plans use post tax money. You don’t pay taxes on the appreciation as long as you spend the dollars on tuition/school costs.

        We put in a good chunk of cash 13 years ago when my son was born, and have watched it grow since, hoping he’ll be able to use it on college a few years from now. It would have really sacked to be screwed over and have the rug pulled out from under our prudent investment in his future. We could have done other things with that money and it wouldn’t have made any difference.

        We escaped this time, but I really can’t stand Obama’s continual grasshopper advocacy, where people who work hard and plan are seen as jerks, and couch potatoes are to be given silver platter service.

        1. Well that’s what you get for selfishly saving your money for your kid’s education instead of using it to buy useless shit in order to boost aggregate demand. You must hate America.

  4. The official added that Mr. Obama’s proposed increase in the capital gains tax rate and change to the taxation of inherited wealth would be more than enough money to fund the tax plan.

    So he just wanted to tax 529s for the hell of it, then? Yeah, that’s probably true.

    1. Nah. Wanted to start the discussion about taxing these evil “tax-advantaged savings” so that years down the road when they need to start taxing Roth IRAs, it’s an old “common sense” idea.

      Overton Window, or something.

      1. Probably this.

      2. DING DING DING WE HAVE A WINNER

        They must be shitting their pants over all the money sitting in 401ks and Roth IRAs and the like, all untaxed, all. Just. Sitting. There. They are going to try for it at some point, and this was an exploratory feint at it.

        I mean, they’re thieves, and the money in those accounts is like gold in a bank vault. They want it so bad and are always trying to think up ways to get their grubby little hands on it.

  5. “Loophole”
    I never get tired of that word.

    1. Fucking Obama is a loophole. We forgot to include “no amoral morons” in the requirements for the presidency.

      1. Loophole? Odd way of spelling asshole.

        1. Think of it as a Mobius asshole.

    2. “Loophole” means “anything anyone does no matter how perfectly legal that reduces the amount of money we can steal from them”.

      1. My neighbor’s paycheck goes into his account every month instead of my account. I consider that a loophole.

        1. That selfish bastard!

  6. what is the justification for the taxation of inheritance? I’ve never gotten a good answer. It seems like the money was taxed when it was earned- why should it be taxed again?

    I know, I know, they didn’t earn it.. who cares? Someone, somewhere earned it. Why cant they give it to someone else when they die without having it taxed?

    I don’t care how few people it impacts or how rich they are. Is there a justification other than, “because they can” or “bfytw”?

    1. But those inheriting it didn’t earn it.

      1. Then why allow inheritance at all? Why not have all property seized by the state upon death?

        1. Did the state earn it?

        2. Don’t give them ideas.

        3. Dude, they’re already over halfway there. They take 55% (I believe) as it stands now if you don’t use a method to transfer the estate that avoids the inheritance tax. So they’re only allowing 45% inheritance.

    2. Thinking like a prog, I would say that it’s not fair that the family can continue to hoard their wealth in perpetuity by keeping it tied up in securities and real estate without ever paying their fair share. And social contract / you didn’t build that.

      1. It’s also a healthy dose of “you and your family have climbed on the backs of hard working poor to exploit them and steal the money they earn, so the easiest way to punish you is to kill intergenerational wealth”

        1. Here, I’ll think like a prog: “what bullshit philosophical reasons can I come up with to justify directly stealing from people, but that makes it sound like it isn’t direct theft?”

          1. So very true. Progs have insulated themselves from their theft. If it’s done by a distant proxy, it can even feel virtuous! The simple question that tears apart their foundation of feels is “would you collect the taxes yourself?” Some would. Most balk at the idea of knocking on their neighbors’ doors with a badge and a gun, forcing them to write a check to the government.

            1. Which is why I believe the best use of a prog is lamp post decoration.

            2. There’s a flip side to this too. I’ve actually talked to left-leaners about taxation and it being theft, and they’ve fully gone in on taxation and how the rich need to pay their fair share. So I’ve asked “ok, let’s say they implement a federal lottery, which 10 people win every year. If you win, you do not have to pay any federal taxes that year. You win. Do you pay? I mean, you say you believe in taxation.”

              You will get two answers. The first, if the person is pretty honest, would be “no, I wouldn’t pay, I could use the money.” The second, and more common is them lying and saying they would. The thing is, though, every person I’ve posed this question to who answered that they would still pay was so clearly lying that everyone in the room could see it. Some of them even changed their answer to “no, I wouldn’t pay” after seeing how obvious their lie was.

              Either way it’s a very hard thing for them to just dismiss.

              1. Support for taxation resembles Stockholm syndrome.

      2. Even forgetting fairness, inherited money will still in all likelihood be better used by the inheritor than the state; going to pay for education and training for all descendants for a few generations, being reinvested and providing useful capital for the private sector. It’s not enough to say ‘not fair;’one has to prove one could allocate it more efficiently, and I doubt very much that Obama can.

    3. That’s where the money is.

    4. Re: Spencer,

      what is the justification for the taxation of inheritance? I’ve never gotten a good answer.

      A few years back that question was answered by a guy whose nickname was MNG (not to be confused to WNG who is a dude that comes in from time to time and is a libertarian – MNG is a socialist.) He replied that the reason inheritances are taxed is because the recipients were not deserving of such windfall. His answer was based on the notion, as far as I could gather, that the only wealth you should amass is one you created yourself.

      Obviously, there is no logical justification to think that only self-made wealth is moral, so I told him that the only explanation I could think of why people accept taxes on inheritances is because of envy, pure and simple.

      1. It all ties to this notion that the state ultimately owns everything. Until that idea gets shitcanned, stuff like this is going to happen.

      2. that the only wealth you should amass is one you created yourself.

        Except, of course, he wanted to take that too.

        Oh, and anyone who went to medical school was volunteering to be a slave to anyone who demanded their services.

        1. When you start talking about the labor theory of value with a socialist, you start to realize that they have no philosophical problem with enslaving that labor, if it’s for the “greater good.”

          1. Doesn’t the “greater good” always involve enslaving someone?

            1. Generally it involves killing people too

              1. [blink][blink]bbbbbbbbbut it’s the greater good /progderp

          2. Yeah, something about the end justifying the means, blah, blah, blah. Either John or Tony can tell us all about it.

      3. By that logic, if we can ascribe someone’s ‘self-made’ fortune to luck, such as their stocks going up due to some complete fluke that no one expected, then the state should be able to seize that too. After all, they didn’t ‘earn’ it.

        And hell, most of the money I earn can be ascribed to my parents being willing to finance my education. And even more of it can be ascribed to the IQ I was born with, didn’t ‘earn’ that. Ultimately, taken to its logical conclusion, it ends with ‘the government decides who deserves what,’ which ultimately translates to ‘from each according to his ability, to each according to his need.’

        1. And of course, no one ever gets to decide what he, himself, needs – that’s always to be decided by others.

        2. The luck factor is particularly amusing to me, given how almost every state exploits people’s interest in luck in the form of a lottery.

    5. The closest I ever got to a semi-gogent argument had something to do with trying to prevent a permanent rich aristrocracy from arising in America like it has in Europe.

      At which point I pointed out the European aristrocracy was based around claims and titles of nobility, not on wealth that was EARNED by an ancestor and passed down, which is far different from wealth granted to a family by the governing class.

      Followed by several seconds of silence, followed by the standard Marxist horseshit about wealth being plundered from the proletariat and the government needing to step in and redistribute it. Because “fairness.”

    6. what is the justification for the taxation of inheritance?

      Plank 3: Abolition of all rights of inheritance.

    7. I oppose the inheritance tax as stoutly as anyone. So, please let me ask you not to hurt a good cause with a worthless argument. I mean an argument with its basis in the mistaken assertion that “it seems like the money was taxed when it was earned.”. I have a large capital gain on my house, bought years ago. I have not realized that gain and therefore have not ever paid tax on it. Similarly, I have a large IRA. The money I put into it and the subsequent gain on those investments have not yet been subject to any tax. Further, I have significant unrealized capital gains in my taxable account. In fact, my estate consists chiefly of unrealized capital gains and tax-deferred retirement accounts. Imposing inheritance tax on such assets is not taxing them again; it is taxing them for the first time.

      For the record: my estate is not big enough that my heirs will incur estate tax. The estate could grow enough that inheritance tax applies, though my age is 75 and such prosperity seems unlikely in my remaining years.)

      1. How much real gain do you have if inflation – actual increase of the money and credit supply – is taken into account?

      2. The inheritance tax is on the whole value of the asset, not just the gain. Moreover, once the gain is realized, it will be taxed, and so there is double taxation one way or the other.

        The argument is not worthless, and the only one doing a disservice here is you.

      3. “, I have significant unrealized capital gains in my taxable account. In fact, my estate consists chiefly of unrealized capital gains and tax-deferred retirement accounts. Imposing inheritance tax on such assets is not taxing them again; it is taxing them for the first time”

        Not exactly true.

        Investment income genereated from corporate stock is already taxed at the corporate level. Dividends are paid out of income that has already been taxed. And capital gains are due to increases in the value of the company due to reinvested earnings that have already been taxed as well. As the stockholder is the owner of the corporation, he is the one paying those taxes as he owns his prorata share of the assets (cash) that is used to pay those corporate taxes.

    8. “what is the justification for the taxation of inheritance? ”

      Ultimately, what is the justification for governemnt forcing anyone to pay for anything other than the value of actual services that government is providing to that individual calculated on a user fee basis?

      The government has to collect reveune to pay for the services it provides but their is no justification for forcing one person to pay for services received by another.

      The issue is no different than it is in the private sector. Home Depot cannot use force to make customer A pay for the the lawn mower customer B took home.

      There has never been any legitimate reason for government to do the equivalent.

  7. I wonder if one of his staffers was trying the star trek censorship principal. Put some truly awful stuff in what you are trying to get passed, let people catch it and talk you out of your stupidity, then go ahead with the parts you actually wanted to pass.

    1. I’ll try this with my girlfriend. “How about we try a golden shower tonight hun?”… “What!!!????” “Oh, ok, just anal then.

  8. I am altering the deal. Pray I don’t alter it any further.

  9. Black letter law isn’t a loophole, bitch. And it’s not a fucking typo, either. Fuckity fuck fuck fuck.

    1. I suddenly understand how Marvin the Martian felt when he got disintegrated.

  10. Nothing says, “I care about the Middle Class” more than “I want to rob your college-savings to fund the enlargement of Federal Bureaucracy”

    1. This was dumb, even for Obama. And that’s saying something profound.

      1. I thought that as well. Seemed awfully politically tone-deaf.

      2. If him saying “i want to steal from your childs piggy bank” wasnt enough…

        … he adds insult to injury by saying,

        “I know your kid gets straight A+s and you dream of their attending Harvard, but see, I need to take your money and give it to the idiots in their class who slacked off, so then they can spend another 2-3 years in community college fucking around, because, see = community college teachers will vote democrat! So kick in, Bro!”

  11. Politics Barbie says, “Wealth redistribution is hard.”

  12. Given it has become such a distraction, we’re not going to ask Congress to pass the 529 provision so that they can instead focus on delivering a larger package of education tax relief that has bipartisan support distraction

    FTFY

  13. (Thankfully) that didn’t take long.

    Obumah is starting to look more like a wimp as well as a fool.

    At least this dumb idea is dead. (For a while).

  14. Next time, rich people, it will take more than children to save you.

  15. Sounds like a slam dunk to me dude.

    http://www.BestAnon.tk

    1. No, no, no. It was a terrible idea. Can’t you even interpret the polls, Pedo-bot?

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  17. I must have missed something as I did not know that he even tried. Therefore, I can say now. Well, at least he tried. I know that he failed at many things and I guess his main mistake is to saying things first and then failing. People have almost no faith in him. He’d rather kept silence about his good intentions and the surprised everyone. He’d win our trust over. But everything that has something to do with education is very sensitive for Americans. They are easily get upset over things like that (man, take a look at our debt!!!). Even students using original coursework services is not even half-upseting.

  18. Who cares whether Obama drops his 529 college savings plan or not?

    It isn’t up to him to decide such things anyway.

    It was never going to get enacted by Congress and neither is any of the other socialist nonsense he was blovating about in the SOTU speech.

  19. this was not killed because it’s a bad idea. If only that were true.

    It was killed because a) 529s are used by the inner circle – White House staffers and reporters and b) 529 proceeds, eventually, go to his elitist academic constituency.

  20. Good, I’m about to open one up!

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