The hypocrisy of the elitist class seems to have no bounds.

"President Obama is making a massive push to begin taxing 529 college savings plans in order to fund his "free" community college scheme. The plan would effectively punish those who save for college and redistribute that money to those who didn¡¯t.

The irony here is that not only do the Obamas use a 529 to save for Sasha and Malia's college education, they made an absolutely massive tax-free contribution to that fund. Now, they're trying to take away the very same tax break from others.

from Forbes:

President Obama proposed this week to tax the earnings on new contributions to Section 529 college savings plans. These plans work like Roth IRAs for college¨You put in after-tax money, the money grows tax-free, and withdrawals are tax-free if used to pay for tuition and fees.

Obama wants the earnings on these plans to face ordinary income tax, at rates as high as 39.6 percent federally. 529 expert Joe Hurley correctly predicts that taxing 529 plans this way will result in their effective repeal, as new contributions in will dry up overnight.

As I pointed out yesterday, the tsunami of popular outrage (my original post passed the quarter million mark this morning) can be explained by seeing that this tax increase is really an assault on the American Dream.

But just your American Dream¨not the Obamas.

You see, back in 2007, Barack and Michelle Obama made a stunning $240,000 contribution to the 529 plans of their two daughters. There's a special provision in 529 tax rules that allow for a "jumbo" contribution in exchange for not gifting any more money to your kids for the next five years. The Obamas (wisely) took advantage of this. You can see the actual tax form reporting here.

This is odd, considering some of the nasty things the White House has said about 529 plans in recent days. Administration officials have called 529 plans "inefficient", that 80% of the benefits accrue to those making more than $250,000 per year, and that 529 plans should effectively be repealed in order to plus up an education tax credit. Obama Administration mouthpiece Slate went so far as to call de facto 529 repeal "a great idea."

In fact, the College Savings Foundation¨which knows a thing or two about the 529 industry¨says that 70% of families which own a 529 plan make less than $150,000 per year, and almost 95% of families make less than $250,000 per year (note that this is the Obama Administration's preferred dividing line to mark off the "middle class"). The average account balance in these 12 million 529 plans is just under $21,000.

http://poorrichardsnews.com/ [Forbes piece is linked]

Quote: Cincinnatus wrote in post #1

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The irony here is that not only do the Obamas use a 529 to save for Sasha and Malia's college education, they made an absolutely massive tax-free contribution to that fund. Now, they're trying to take away the very same tax break from others.

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