[quote=harvey][quote=CA renter]Really, why would anyone invest in a 529 plan if it passed?[/quote]
Because a parent paying a 33% marginal rate can take a deduction now and pay the student’s rate, which will likely be 15% or less, when they use the money later.[/quote]
Until your kids are over 18, your kid’s capital gains/income above $2k is taxed at your tax rate if you’re doing your taxes correctly. It’s been like that since 1986 with the Kiddie Tax…
And thanks to the Small Business and Work Opportunity Tax Act of 2007, even between ages 19-23, your kid’s capital gains is still taxed at your tax rate…
And after 23, they (hopefully) have graduated from college and are working at a decent job, so that won’t even be useful…unless you plan on paying for their graduate/post graduate education (assuming they are going to want to do that)….
As much I would like to think this is a slam dunk GOP will shut this down… I don’t know…. Since only 3% have these accounts, I’d say it’s the perfect sacrifice that the GOP could give up just to shut up the democrats…
If this does go into effect. You think our government would also allow us to withdraw, pay normal income taxes without penalty if such laws went into affect? Doubt it…
In hindsight, although I’m pretty happy my kid’s 529 plan turned from around $34k to around $75k right now…given the hindsight, I sort of wish either I put that money into a normal account….I should have done what most americans do and taken that $75k, paid taxes on it and then used it as a downpayment toward a Porsche GT3….And then when I can’t afford to send my kid to school, ask everyone else to help me pay for it… Of course, being me I saved, and invested, and tried to lived within my means…Silly me for trying to be financially responsible… What was I thinking?
