Obama’s Contribute $240k Into Their Kid’s College Savings Plan In One Year. Now That They Are Set They Want To Essentially Do Away With College Savings Plans For Everyone Else In America.
Barack Obama has proven to be many things, and not to be several others. His most common trait seems to be Hypocrite-in-Chief. The president recently revealed that he wanted to make two-year community college “free”. Many wondered how that could happen, and others already had some idea, but he surprised everyone with his exact plans. As The Federalist pointed out, the US Herald reported earlier, that he intended on taxing college savings plans, known as a 529 plan, as a way of redistributing funds into his “free” community college plans. The plan was buried in the excessive bureaucratic paperwork of his new tax proposal.
“Under current law, 529 plans work like Roth IRAs: you put money in, and the money grows tax-free for college. Distributions are tax-free provided they are to pay for college. Under the Obama plan, earnings growth in a 529 plan would no longer be tax-free. Instead, earnings would face taxation upon withdrawal, even if the withdrawal is to pay for college.”
Now, we have a better idea on what this tax would look like. According to Forbes, these 529 plans could face up to a 39.5 percent federal tax. A 529 plan expert, Joe Hurley, points out that this would effectively repeal 529s. New contributions would “dry up” overnight.
Ironically, as your dream of college bound offspring dissipates, President Obamas flourishes.
In 2007, Barack and Michelle contributed $240,000 to the 529 plans they have prepared for their daughters. That is “Thousand” with a capital 'T', as our president might say. So, what does this have to with the ordinary common citizen? Forbes explains that there happens to be a loophole in the new plan, that the Obamas exploited before the president even introduced it.
“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.”
As an added bitter taste of irony, Obama is not a big cheerleader of 529 plans. In fact, his administration has attacked them recently and called them “inefficient”, because “ 80 percent of the benefits accrued” go to Richie Rich people making $250,000 per year.
This seems to conflict with the College Savings Foundation's findings, which suggest, that 70 percent of families who own a 529 plan make less than $150,000 per year. These crazy 1 percent-ers! Also, 95 percent of families that utilize the plans make less than $250,000 per year. In over 12 million of these 529s, the balance is under $21,000.
It sounds like the Obamas are the ones who should lose the privilege to use 529 plans, by their own personal whining at least. Barack and Michelle are the same hypocrites who authorized those famous school lunch programs, that the Washington Times reported, has already failed in 48 out of 50 states. It has caused kids who had their lunch packed by their parents to be tossed out by school officials. For the kids who did purchase them willingly, they have claimed to be very hungry after eating it. Other issues include kids throwing the lunches out, student boycotts, lunch costs increasing, and schools struggling to comply with overly complex rules.
So, naturally you would assume that at least Barack and Michelle's kids are subject to the same horrendous lunch program. Well, you would be wrong. What is good for citizen 'Goose' is not good for President and First Lady 'Gander'.
As the US Herald reported last December, the private $36,000 per year private school that the Obamas send their children to have very different lunches. The Daily Caller reported on a typical lunch menu for the Obama children... for just one school day.
So, what are we to extrapolate from these moves from the president and the first lady? Obviously, what they implement on us peasants, is apparently not good enough for the King and Queen.
What are your thoughts? Does taxing 529 plans to fund “free” community college sound like a good idea? Should the president have to adhere to the same standards he and the first lady set for us?
Leave your thoughts below.