Obama's Tax Increase on the Middle Class. YES, Increase

[dullard]

The tax is proposed. Fact.

So far, the only one proposing the tax seems to be you. Just wait a bit, then complain.

 

[Double Trouble]

LOL!


And WD gets cut off at the knees.

How so? WD's points stand. Bowfinger correctly points out the source of the Forbes article, I definitely agree with taking it into consideration.

 

[WackyDan]

$120k for a child certainly is sizable.

Except that already posted above... The average is $20,671... not $120k.

 

[brycejones]

Proof is above. I await your debate.

Really? I see you foaming at the mouth....

How many keyboards do you go through a week?

 

[WackyDan]

So far, the only one proposing the tax seems to be you. Just wait a bit, then complain.

I didn't realize I made it up out of thin air?

 

[Double Trouble]

$120k for a child certainly is sizable.

The $120k per person was incorrect. Apparently it's closer to $20k. Oh, and it's not necessarily for "a child", the account can be used for multiple children as well. You can open multiple accounts for multiple kids, but you can use one account for multiple kids as well. $20k wouldn't even pay for 1 kid to get through college. Based on those numbers it hardly looks like something used by the ultra wealthy.

 

[Double Trouble]

So far, the only one proposing the tax seems to be you. Just wait a bit, then complain.

It's been widely reported, by many media outlets including AP. I haven't seen any official proposal yet, so we'll have to wait for that. The proposal could always be amended before the details are revealed.

 

[WackyDan]

The $120k per person was incorrect. Apparently it's closer to $20k. Oh, and it's not necessarily for "a child", the account can be used for multiple children as well. You can open multiple accounts for multiple kids, but you can use one account for multiple kids as well. $20k wouldn't even pay for 1 kid to get through college. Based on those numbers it hardly looks like something used by the ultra wealthy.

Indeed.

There is a $14k limit on contributions per year before gift taxes have to be applied.

If you contribute the limit of $14k per year for ALL 18 years prior to college your net contributions before gains (you can indeed also have down years and lose some) are $252k.

Those funds are earmarked for the child. Yes, they can be pulled at anytime by the adult steward of the account. If used for non educational needs by the child or if pulled by the adult you pay your income rate plus 10% penalty on the proceeds. This is similar to early withdrawal of other investment vehicles but at least those have higher limits and special exclusions for taking loans against, etc.

Either way, doesn't look like the rich are getting rich off of 529's and at least those middle class... those 600k families in the middle class that actually have 529's are benefiting (based on the treasury secretary's comments).

At worse the rich are able to pay for med school for their spoiled kids like they were going to anyway. Big deal.

 

[Jhhnn]

That article is bullshit. You can pick any state plan you want and you don't need a broker. You are able to choose a low fee plan and one with a good history of return.

I live in NC and picked the Utah plan and it has returned 12% each and every year for the last three years.

So Jhhnn... Who is right? Forbes or Bloomberg. You have a better response than the typical liberal shit you spew?

Heh. From the bloomberg article-

The appeal of 529 college savings plans is that investment returns aren't taxed as long as the money's used for education. States set the investment options, and often add on additional tax incentives. Despite these perks, less than 3 percent of American families use the plans. Those who do use them are disproportionately wealthy, with 25 times more assets than those who don’t use the plans, according to the Government Accountability Office (GAO).

Lots of American families have trouble setting aside money for a Christmas account let alone having a 529 plan. You know- Mitt's 47%. Negative effects fall almost entirely on the upper end of the food chain.

 

[Jhhnn]

The $120k per person was incorrect. Apparently it's closer to $20k. Oh, and it's not necessarily for "a child", the account can be used for multiple children as well. You can open multiple accounts for multiple kids, but you can use one account for multiple kids as well. $20k wouldn't even pay for 1 kid to get through college. Based on those numbers it hardly looks like something used by the ultra wealthy.

Of course it's used by the ultra wealthy. Their accountants & advisors deliver up every tax break possible. Mom & Dad max out contributions when the children are infants, as do both sets of grandparents. Then they let compound interest work for them.

 

[OverVolt]

Buried in Obama's proposed "tax cut for the middle class" is a proposed tax on 529 college savings plans. You know, those plans that make college/trade schools more affordable for the middle class? Yet, because they are investment savings plans, the Obama admin thinks that the stupid middle class won't even bat an eyelash at the hidden tax.

The 1% probably rarely utilizes these plans as an investment vehicle, yet here is Obama wanting to tax them. Why even have a 529 in your child's name then? Just invest the money as you normally would... It is going to get taxed anyway.

I guess community college is good enough for U.S. children according to Obama.

Yes, I'm ranting. I did everything right. When my daughter turned 1, I started depositing money in a 529 plan with a good history of return. Every month a small amount is debited out of my bank account and transferred there. It is for her to use tax free for education expenses. It will help us save for retirement while still insuring that we have done something for her college education (should she choose college). What she will have at 18 years old is up for debate, but it won't be a ton of money, we'll probably still have to help her, and she'll probably still have to work part time and perhaps take on college loans pending her choice of schooling.

I'm not the 1%. Thanks Obama! Or should I say... FUCK YOU.

http://www.forbes.com/sites/ryanell...ax-hike-on-middle-class-529-college-savers/2/

"After the tax law change (which was made permanent in 2006), amounts withdrawn to pay for college were totally tax free. 529 plans thus became a kind of Roth IRA for college savings–you didn’t get any up front tax break (except maybe on your state income tax), but you could rest assured that your college nest egg’s growth would face no taxation when it came time to make tuition payments."

"The Obama plan aims to turn back the clock, once again taxing earnings growth in 529 plans as ordinary income. This is a direct and clear tax increase on middle class families sacrificing to save for college, and it’s likely to result in a mass divestment from this type of savings."

I feel really sorry for you, if that helps.

 

[nickqt]

Heh. From the bloomberg article-



Lots of American families have trouble setting aside money for a Christmas account let alone having a 529 plan. You know- Mitt's 47%. Negative effects fall almost entirely on the upper end of the food chain.

This.

529s are available for more than just the parents, and they are tax shelters that allow people with disposable income to plop money in for children without it counting against the annual gift amount and the lifetime gift amount.

I'm not against 529s, and again, you need to actually state what taxes are going to be added. But saying that the rich don't use them is incorrect, unless you're talking about idiotic rich people who are stupid because they don't hire accountants/attorneys who save them more in taxes than they pay in accountant/attorney fees. And saying that it's some sort of "middle class" tax increase ignores that the 529 tax shelters aren't all that commonly used by the middle class, so it's not some universal tax on the middle class.

Again, the tax boogieman is comin' to get you kind of post.

 

[OverVolt]

Its pretty clear that they want to screw over the young, though.

 

[Jhhnn]

Its pretty clear that they want to screw over the young, though.

Yeh, free tuition at 2 year colleges is a real fuckover, huh?

 

[OverVolt]

Yeh, free tuition at 2 year colleges is a real fuckover, huh?

No its just a way to waste our time. CC doesn't lead to very many real opportunities. A 529 on the other hand can actually pay for a decent degree. The good programs cost some decent coin. Its always been that way. But now you're going to get trapped into trying to say a degree from anywhere is equivalent to every-other degree so I'll save you the time and just state the fact that they are not.

I don't even think you can become a plumber apprentice through the 2-year CC plan. Not sure though. Most of the actual job skills you can learn at CC are not for college credit.

FWIW I know someone whose highest education level currently is a general studies degree from CC and they got a job, ran it through the HR pay calculator and it garnered them $0.00 in more pay.

 

[nickqt]

No its just a way to waste our time. CC doesn't lead to very many real opportunities. A 529 on the other hand can actually pay for a decent degree. The good programs cost some decent coin. Its always been that way. But now you're going to get trapped into trying to say a degree from anywhere is equivalent to every-other degree so I'll save you the time and just state the fact that they are not.

I don't even think you can become a plumber apprentice through the 2-year CC plan. Not sure though. Most of the actual job skills you can learn at CC are not for college credit.

FWIW I know someone whose highest education level currently is a general studies degree from CC and they got a job, ran it through the HR pay calculator and it garnered them $0.00 in more pay.

529s are used to pay for college education, books.

Community college hand out Associate Degrees, but most people who go to Community Colleges do so to take their required classes that have nothing to do with their major/advanced degree, such as English, Math, psychology, and other associated required classes.

So, anyone who thought they were going to Community College to get an Associates Degree and is wondering why it isn't helping them too much didn't quite grasp the reason why Community Colleges exist. They are there as a cheap alternative for the first 2 years of a Bachelor Degree, which is the new high school diploma.

 

[Belegost]

No its just a way to waste our time. CC doesn't lead to very many real opportunities. A 529 on the other hand can actually pay for a decent degree. The good programs cost some decent coin. Its always been that way. But now you're going to get trapped into trying to say a degree from anywhere is equivalent to every-other degree so I'll save you the time and just state the fact that they are not.

I don't even think you can become a plumber apprentice through the 2-year CC plan. Not sure though. Most of the actual job skills you can learn at CC are not for college credit.

FWIW I know someone whose highest education level currently is a general studies degree from CC and they got a job, ran it through the HR pay calculator and it garnered them $0.00 in more pay.

You seem somewhat uninformed about community colleges, data from CA shows that around 40% of 2-year students transfer to a 4-year university. That seems like a real opportunity if 40% of the students are able to transfer. This compares well also with the rate of retention of students 1st year to 2nd year at 4 year universities, which is around 65% and rate of conversion to degree, which is below 50% (same link, difficult to clarify as the study doesn't aggregate the numbers between public and private schools.)

 

[theeedude]

OP fell for Forbes article. LOL.

 

[ivwshane]

Propaganda works and the OP proves it!


Thread backfire!!

 

[shortylickens]

Theres nothing wrong with taxes. Taxes pay for all the crap people keep begging the government for.

The problem is the citizens. They are so apathetic about their government they have no clue exactly how much money is being collected, where its going, who's skimming off the top, or whether the dollars are even fixing problems or not.

Voters need to clear out the current congress, get the damn budget under control, and decide what it is they really need from centralized spending.

Maybe if taxpayers woke up and paid attention, our fearless leaders wouldnt feel the need to trick us, or at least wouldnt try for fear of getting caught.

 

[ivwshane]

Theres nothing wrong with taxes. Taxes pay for all the crap people keep begging the government for.

The problem is the citizens. They are so apathetic about their government they have no clue exactly how much money is being collected, where its going, who's skimming off the top, or whether the dollars are even fixing problems or not.

Voters need to clear out the current congress, get the damn budget under control, and decide what it is they really need from centralized spending.

Maybe if taxpayers woke up and paid attention, our fearless leaders wouldnt feel the need to trick us, or at least wouldnt try for fear of getting caught.

I agree and the job of the fact checker used to be the press. Unfortunately the press has simply become echo chambers for politicians, where access to the politician is the end game and not the means to an end. As a result, Americans are getting dumber and becoming more gullible, like the OP, which only causes the cycle to repeat itself.

 

[OverVolt]

You seem somewhat uninformed about community colleges, data from CA shows that around 40% of 2-year students transfer to a 4-year university. That seems like a real opportunity if 40% of the students are able to transfer. This compares well also with the rate of retention of students 1st year to 2nd year at 4 year universities, which is around 65% and rate of conversion to degree, which is below 50% (same link, difficult to clarify as the study doesn't aggregate the numbers between public and private schools.)

You act like the program is also paying the university costs.

That 40% rate is going to decrease under the plan since people who can't afford university are going to go and end up at a dead end IE a waste of their time like I said.

 

[LegendKiller]

Uhh-wah!

http://www.bloomberg.com/news/2014-09-09/why-97-of-people-don-t-use-529-college-savings-plans.html

There's a reason a lot of middle class people don't contribute - they would rather spend the money on themselves than their kids. I see it everywhere, almost everybody I talk to say "they can't afford it", but then they all have i-phones with 10-20gb data plans, boats, nicer cars, vacations, kids have iphones with data plans, all of the toys they could want. The house is decked out. My wife and I have been putting money away since our first was born. We could have had a screen porch put on our house, put a lot more furniture in it, and driven nicer cars for all of that money. Instead, we planned long-term and put money into the NY plan first (state tax writeoff) then the Utah plan after we left NY.

The middle class is also fucking themselves over by not saving and, instead, trying to spend every damn penny they have on shit they don't need.

 

[LegendKiller]

Yeh, free tuition at 2 year colleges is a real fuckover, huh?

How about he do something real, like, you know, fix the fucking education inflation problem?

Instead, he just wants to triple-fuck the middle class and debt enslave entire generations.

 

[DrDoug]

There's a reason a lot of middle class people don't contribute - they would rather spend the money on themselves than their kids. I see it everywhere, almost everybody I talk to say "they can't afford it", but then they all have i-phones with 10-20gb data plans, boats, nicer cars, vacations, kids have iphones with data plans, all of the toys they could want. The house is decked out. My wife and I have been putting money away since our first was born. We could have had a screen porch put on our house, put a lot more furniture in it, and driven nicer cars for all of that money. Instead, we planned long-term and put money into the NY plan first (state tax writeoff) then the Utah plan after we left NY.

The middle class is also fucking themselves over by not saving and, instead, trying to spend every damn penny they have on shit they don't need.

So everyone you know is blowing their money instead of saving it and that means everyone who doesn't use this saving plan is like them too? Not only that but you are sacrificing now to save for later, thus you are better in this regard than everyone you see?

My, aren't you a special snowflake! You need to write a book about this. Maybe even start a blog!