Probably true about this not going anywhere with Republicans controlling congress; not sure it would pass with Democrats, either. It’s a bit like talking about eliminating the mortgage interest deduction…they can talk about it so that they sound tough, but it just isn’t going to happen (IMO).
They could only do this going forward. The uproar would be huge if they tried to do this to existing accounts.
Really, why would anyone invest in a 529 plan if it passed? It’s bad enough that there is a penalty if the money isn’t used for qualifying expenses…take the tax savings away, and I doubt that anyone would invest in one of these plans.[/quote]
Only 3% of families invest in 529 accounts. You win if you can give something away to the families that didn’t invest in 529 plans. It’s why I think the day is coming when they are going to do something with Roth accounts. For instance we’ll save you social security payment or boost it and in order to pay for it we’re going to retroactively tax Roth accounts. Yeah you piss off 10% of the population with Roth accounts but you satisfy a bigger percentage of people with the give away.[/quote]+1
