Barack Obama

As reported at The College Fix, President Obama’s original new year tax proposals included a plan to tax (formerly) tax-free college savings “529” plans as ordinary income.

The president himself had taken advantage of 529 rules to make a huge contribution to his plan in 2007.

But now, the administration has done a one-eighty. Officials said that “the backlash against the president’s plan became ‘such a distraction’ that it was best to drop the proposal …”

The Washington Post reports:

The administration had tried to frame the elimination of the tax break as a way to redirect more money to middle-class families, arguing that the savings plans were being used disproportionately by wealthy families.

But the proposal proved to be a serious political miscalculation. With more than $1 trillion of outstanding student debt in this country, the 529 plan has become one of the best tools for families to save for college. About 12 million American families rely on the accounts.

The administration’s proposal to roll back the benefits of 529 plans was like “kicking a ball in your own goal,” said Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities and former economic adviser to Vice President Biden.

“The president’s plan has the puzzle pieces necessary to bring the middle class back, but this particular piece didn’t fit,” said Sen. Charles E. Schumer (D-N.Y.), who lobbied the White House to drop the plan.

Even liberal House Minority Leader Nancy Pelosi (D-Calif.) warned Obama that targeting college savings was a political misstep. Pelosi pressed the case to drop the 529 proposal with senior administration officials on board Air Force One as she flew with the president from India to Saudi Arabia, according to people familiar with the meeting who were not authorized to speak publicly.

Another lawmaker who raised objections to Obama’s proposal was Rep. Chris Van Hollen (D-Md.), ranking Democrat on the House Budget Committee. “This particular proposal undercut the message that they were focused on helping the middle class,” Van Hollen said in an interview.

The president initially had defended his plan claiming that some seventy percent of 529 accounts were held by families making over $200,000 per year.

But the non-profit College Savings Foundation counters that the seventy percent number actually pertains to households making less than $150,000 per year, with another ten percent earning less than $50,000.

Read the full article.

h/t to Instapundit.

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As noted at The College Fix back on January 20, one of the ideas you’ll not likely hear about in President Obama’s tax machinations is the repeal of tax-free 529 college saving plans.

The president wants these plans now to be taxed as ordinary income, with as rates as high as 39.6%.

529 plan expert Joe Hurley says this “will result in their effective repeal, as new contributions in will ‘dry up’ overnight.”

But ironically, Mr. Obama took quite advantage of 529 tax rules back in 2007.

Forbes reports:

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.

Forbes writer Ryan Ellis points out this presidential hypocrisy is not unlike that from 2009 when the president wanted to nix 1,700 low income school scholarships for kids in Washington DC … all the while sending his daughters to the exclusive Sidwell Friends School.

The same daughters who will benefit from that formerly tax-free 529 education plan.

Read the full article.

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IMAGE: YouTube screencap

As you may be aware, the Obama administration leaked some tax proposal details this past Saturday ahead of tonight’s State of the Union address.

But don’t expect to hear about this one in the president’s speech tonight: “roll[ed] back expanded tax cuts for 529 education savings plans.”

Forbes reports:

The levy in question would increase taxes on college savings accounts known as “529 plans” (after their section in the Internal Revenue Code). By definition, these accounts are really only used by middle class families. Poorer households don’t have the extra income to save (and even if they have a little, there are much higher priorities like retirement or saving for a home). Very wealthy families might use 529 plans, but it’s far more likely that they have complex trust arrangements set up for their children.

According to the Investment Company Institute (the trade association for the mutual fund industry), there was $245 billion accumulated in 529 plans in 2014. With just south of 12 million accounts open, that means there’s an average balance of about $21,000 in these plans. This is not a mechanism for rich Democrats like the Kennedys or the Gates to shelter wealth.

… there it is buried on page 9 of the leaked document: “The President’s plan will roll back expanded tax cuts for 529 education savings plans that were enacted in 2001 for new contributions…” Note that this is right before they also announce the repeal of Coverdell Education Savings Accounts (Coverdell ESAs), another similar move against the same middle class savings targets.

529 plans are basically a “Roth IRA for college savings” as funds that are withdrawn to pay for college are completely tax-free.

Obama wants to treat such savings as regular income, subject to taxation rates as high as almost forty percent.

Read the full article.

h/t to Instapundit.

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IMAGE: YouTube screencap

Our own reporter Derek Draplin writes in the Detroit News that students in Michigan aren’t entirely enamored of President Barack Obama’s plan to make community college free for anyone “willing to work for it,” to be laid out at tonight’s State of the Union address:

“Anything free, especially when it comes to college, is a good thing,” said Joseph Juncvic, 18, a freshman.

But Juncvic, who’s majoring in global studies and is also student government treasurer, questioned Obama’s intentions while describing the proposal as a “double-edged sword.”

“What are the effects it’ll have on school quality? Will we be spending more on education?” he asked. “Maybe it’s for his legacy — he wants to be remembered for something.”

Shelby Klein, 20, a sophomore from Alognac studying auto body repair, said the program would especially help families with multiple kids to put through college.

“I could see taxes skyrocketing — right now I’m on financial aid,” she said, but added it would definitely “help me and my parents out. … I’m the oldest and I have three brothers behind me.”

A higher education financial expert compares Obama’s proposal to corporate welfare:

“Poorer kids are already getting free tuition so this money is going to kids that are relatively affluent,” said Dr. Richard Vedder, director of the Center for College Affordability and Productivity, an organization in Washington, D.C., that researches higher education policy.

Read the Detroit News story.

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IMAGE: Pete Souza/White House

In an article titled “The five dumbest health care statements of 2014,” Robert I. Field, professor at Drexel’s School of Law and School of Public Health, offers up a ridiculously partisan quinary of “winners” for the topic in question.

Most astonishingly, perhaps, is number two on Field’s list: “The stupidity of the American voter was critical to passing Obamacare.”

It’s not that the statement wasn’t dumb … it certainly was — on the part of Obamacare architect Jonathan Gruber. It was a dumb thing to say in public, because it brings forth the truth that the Affordable Care Act was sold to the public based on lies — especially the big one, PolitiFact’s 2013 Lie of the Year.

Regarding those lies, like Gruber himself, Professor Field thinks we’re stupid:

It’s not American voters who were stupid but Jonathan Gruber, the MIT economist and key adviser in the crafting of Obamacare, who made that statement. Although he said it in 2013 at a conference at the University of Pennsylvania, it reached a broad audience this past November when a Philadelphia man found a video of it online and posted it for wide dissemination.

Obamacare passed because of a desire by Democrats to reduce the number of uninsured Americans. It is an extremely complicated law, just like Medicare, Medicaid, and President George W. Bush’s Medicare expansion in 2003. None of those laws passed because voters were too stupid to understand their subtleties. Their complexity was not the result of attempts at deception but responses to the underlying complexity of health care. It’s a good thing Professor Gruber doesn’t teach political science.

“… not the result of attempts at deception …”??

You mean like … the individual mandate is not a tax increase? That the ACA would reduce premiums by $2,500 for a family of four? But, most especially, “if you like your doctor, you can keep your doctor — period“?

This doesn’t even address how President Obama and Nancy Pelosi suddenly “didn’t know” about Jonathan Gruber after his revealing ACA comments came to light — even though they obviously do know him. (Obama: “some adviser who never worked on our staff …” Pelosi: “I don’t know who he is.”)

It’s one thing to be a rank partisan, Professor Field, but please don’t pull a Gruber and insult our collective intelligence — again.

Read the full Philly.com article.

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IMAGE: Cat Branchman/Flickr

You might think this is a tongue-in-cheek moment (to be sure, most clear-thinking people do probably think that), but considering how the White House itself, some state governments, and many colleges are cracking down on any sort of conduct that could be construed as “sexual harassment,” the following behavior (via CNN.com) is highly questionable:

After Mike Jones joked to President Obama “Don’t touch my girlfriend” while at a voting booth in Chicago,

Obama got back at Jones after voting, with a hug and a kiss for his fiancée.

“On the cheek, just the cheek — please, Michelle, don’t come after me — just the cheek!” [Jones’ fiancée Aia] Cooper told CNN affiliate WLS-TV after voting.

“Now, he’s really jealous,” Obama told Cooper.

Hold on a second — did the president get an explicit verbal consent from Ms. Cooper to kiss her? No, he did not.

In fact, he ordered Ms. Cooper to kiss her:

obama-kiss

I wonder what would happen to, say, a fraternity president if he had ordered a female party attendee to kiss him … hugging her all the while?

Without any clear — affirmative — consent, the frat prez could be brought up on sexual harassment/assault charges.

Don’t laugh! It’s not as if we haven’t read about such instances at least as silly

Not to mention — haven’t we been told time and time again that sexual harassment is partly about “power differentials?” How much more powerful does it get than the president of the United States?

Read the full article.

h/t to Althouse.

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IMAGES: New Cellar Door Films/Flickr; CNN video screen capture