Nothing the Government ‘Gives’ is Free

President Obama wants everyone to have two “free” years of junior college. In his recent “State of the Nation,” address he laid out new tax packages that includes a $320 billion hike to help pay for this plan.

But here’s what he didn’t say…

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.

If Obama has his way, 529-Plans will no longer be tax-free, instead those earnings will be taxed upon withdrawal, even if it is used to pay for college.  In addition to taxing college savings plans, Obama is calling for a hike in capital gains taxes, an increase in the death tax, a bank tax and an increase in retirement plan taxes.

It’s nothing more than a redistribution system as those who are saving and planning ahead for college will have to foot the bill for those who didn’t.

 

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