[Coronita]

[quote=FlyerInHi]As a concept, I don’t see why tax deferment should be avoided, even though deferment might not be permanent.

You defer taxes as long as you can, and pay taxes when they come due. You still benefit from paying later rather than sooner.[/quote]

In concept, think of the case that your tax rate is higher later what it is now…For example, suppose Hillary is president in 2024 and she decides that LT capital gains rate should be 30% for everyone. Because obviously everyone things capital gains should be taxed at a higher rate…

Or if the 529 plan is like an IRA, withdrawals would be taxed more like ordinary income, not LT capital gains. And that will depend on your tax bracket. (Granted, obama says in case of the 529 plan, it would be taxed at your kid’s rate…which likely is your tax rate because of the kiddie tax)

Reality is, it’s not so simple as that. It depends also on whether you plan on buying/selling during that period when you are invested…. Buying/selling in a tax deferred account doesn’t incur taxes on gains during that time. So conceivably, if you do well, more of your money compounds each year than if you buy/sell in a normal account and have to pay capital gains/dividends along the way… So it depends…

For me, I just wouldn’t want to tie my money into a limited use account, if it was just a tax deferral. partly because I also anticipate in my future, my income will be more than my wage incomes now…

[Coronita]

[quote=FlyerInHi][quote=livinincali] Taking away a tax benefit isn’t unconstitutional, it’s why I like to stay far away from deferred benefits promised by governments. They are under no obligation to keep those promises and the people that made those promises are long gone by the time they come due.[/quote]

That doesn’t make any sense. Any deferment of taxes is worth something and worth doing. Time value of money.[/quote]

That deferment comes at a price. Those funds can only be used for a certain purpose and they cannot be withdrawn without a penalty (at least the gains portion)…

I doubt this will pass since thankfully the GOP is already objecting to it.. BUT, if they are going to change the rules, then there should be an option to withdraw penalty free as well (you just pay the capital gains taxes on it)…

But the idea that this is a “wealth tax” is just absurd.

http://www.utsandiego.com/news/2015/jan/22/obama-idea-to-trim-college-savings-plans-hits-gop/

“Middle-income families that have worked hard and saved to send their children to college should receive our support, not a new tax bill to pay for (Obama’s) agenda,” said Rep. Lynn Jenkins, R-Kan.

Jenkins said she supports the American Opportunity Tax Credit, but said the $2,500 limit doesn’t come close to covering the annual cost of a college education.

“I have two kids in college. It’s about $20,000 per kid, at a minimum,” Jenkins said. “Where are we supposed to get the rest?”

Thank you Jenkins…Well said. Shear lunacy at the white house. I want what he’s smoking there..

[Coronita]

[quote=livinincali][quote=flu]I wonder why Obama/Democrats didn’t go after the carried interest loophole that hedge funds and private equity managers enjoy…

I wonder why Obama/Democrats didn’t listen to Warren Buffett and try to propose the “Buffett Rule”, which would have been an explicit tax on the “rich”

Instead, they want to tax the 529 plan? Really?….[/quote]

529 plan holders are a small group and don’t have lobbyists to fight for them. Easy target that will produce little uproar and of course little income.[/quote]

So basically what you are say is Obama/Democrats are bullies that like to pick on the minority of financially responsible people that went out of their way to try to save/invest in their family’s future…because they are an easy target… no different than a classroom bully that goes after the kid that is the weakest in the class…knowing that no one is really going to help them….

yup, that pretty much sums it up…

[Coronita]

I wonder why Obama/Democrats didn’t go after the carried interest loophole that hedge funds and private equity managers enjoy…

I wonder why Obama/Democrats didn’t listen to Warren Buffett and try to propose the “Buffett Rule”, which would have been an explicit tax on the “rich”

Instead, they want to tax the 529 plan? Really?….

[Coronita]

[quote=scaredyclassic][quote=flu][quote=AN][quote=flu][quote=harvey][quote=flu]I’d like to see folks try to defend this one….[/quote]

So have you actually looked at the numbers?

It doesn’t seem that these changes would result in a net increase in taxes for most families/students.

With the $2500 credit, it could be a net decrease.[/quote]

Except for households above the cap..[/quote]Cap is $180k as a couple or $90k as a single. Don’t you know that you’re rich when you make that much more than the middle class? Be happy that you’re rich and quit ya whining.[/quote]

So basically, almost every enginerd here in san diego that is single or every double income family in California that actually values their kid’s education…is…well screwed….[/quote]

you can value learning and go to call state and pay little. In my uneducated but semi informed opinion the engineering program at SDSU is very good or at least good enough. We write a small check each semester. My kids on the dean’s list and I don’t think he studies relentlessly, socompetition must be reasonable.[/quote]

That’s great for people that didn’t already dump their money into a 529….Not so great for people already with a 529…But I reread the taxable withdrawal rules of the 529…just in case….Principal amount can be withdrawn without a penalty, earnings get taxed with a 10% penalty…unless your kid get a nontaxable scholarship, for which the same amount can be withdrawn without penalty,subject to ordinary income taxes i think.

Anyway, I doubt this will pass. And besides, if there really ends up being free community college, I’ll be signing up for as many auto body/mechanic shop, photography, graphic artist, woodshop, real estate broker, and metallurgy classes as possible, even though it will be only to fulfill my hobbies…..hopefully, taxpayers paid of course 🙂

[Coronita]

[quote=AN][quote=flu][quote=AN][quote=flu]Everytime I hear the word “free”… I’ve been accustomed to thinking “ok now, how much is this going to cost me…”

Lol[/quote]That’s the price of being rich :-)[/quote]

Is that Obama “rich” or “rich rich”?

(couldn’t resist)[/quote]
Same as lavish, rich only have one definition.[/quote]

I prefer to be Hillary “flat broke” or Romney “middle class”

[Coronita]

[quote=AN][quote=flu]Everytime I hear the word “free”… I’ve been accustomed to thinking “ok now, how much is this going to cost me…”

Lol[/quote]That’s the price of being rich :-)[/quote]

Is that Obama “rich” or “rich rich”?

(couldn’t resist)

[Coronita]

Everytime I hear the word “free”… I’ve been accustomed to thinking “ok now, how much is this going to cost me…”

Lol

[Coronita]

[quote=AN][quote=flu][quote=harvey][quote=flu]I’d like to see folks try to defend this one….[/quote]

So have you actually looked at the numbers?

It doesn’t seem that these changes would result in a net increase in taxes for most families/students.

With the $2500 credit, it could be a net decrease.[/quote]

Except for households above the cap..[/quote]Cap is $180k as a couple or $90k as a single. Don’t you know that you’re rich when you make that much more than the middle class? Be happy that you’re rich and quit ya whining.[/quote]

So basically, almost every enginerd here in san diego that is single or every double income family in California that actually values their kid’s education…is…well screwed….

[Coronita]

[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?

[Coronita]

[quote=njtosd][quote=scaredyclassic]im suspicious of anything that has to do with the educational profitmaking complex.

in a way, it could keep tuition artificially high, since it motivates parents to take big risks with money to save for tuition.

the bottom line is the price of education is way out of line due to federal subsidies in loans anyway. maybe this is just another symptom of that problem, that is, another tax advantage.

should i be incentivizized to take bigger risks with educational savings to have a bigger pt of cash to pay an even higher tuition bill? sheesh. double or nothing.[/quote]

+1. Have been looking at colleges for my oldest and have been amazed at the (expensive and unnecessary) amenities. Going to college used to be considered a somewhat spartan existence – clearly not anymore. I was just talking to a semi-employed college grad who has $250k in debt – I can’t see how she’ll ever dig out. It’s a mess.[/quote]

I think I mentioned before. My neighbor owns a dental practice and we had a conversation that he mentioned several dental graduates were seeking employment in his office because the graduated with $300-400k in student debt..And with that debt, there’s no way a bank is going to lend them additional money to start their own practice.

[Coronita]

[quote=harvey][quote=flu]I’d like to see folks try to defend this one….[/quote]

So have you actually looked at the numbers?

It doesn’t seem that these changes would result in a net increase in taxes for most families/students.

With the $2500 credit, it could be a net decrease.[/quote]

Except for households above the cap..

[Coronita]

…See what happens when we continue down the dangerous slippery slope of taxing investments for “rich(er)” people….Pretty soon, somewhere, someone will think of something else to pay for “free” and anyone or everyone that “has more” is “rich”….

So much for this being just a tax for the wealthy. Its more of a tax on the financially responsible…again…

I told you so…I’d like to see folks try to defend this one….

[Coronita]

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[Coronita]

[quote=AN][quote=flu][quote=AN]It’s never too late :-)[/quote]

@$400/share AH, it’s a little too rich for my blood…[/quote]Does it really matter if it’s $400/share or $40/share? The market cap is still the same and stock moves with the same % anyways. So, with $400 stock, it’ll move in $ while the $40 stock, it probably would move in cents. Question is, do you believe $20.32B market cap is rich or not.[/quote]

Well, I remember seeing it years back around $75/share or so, and even then I thought it was “expensive”…That’s why I can’t digest $400/share. Of course, we know because I’m not in, it’s really going to $500/share, and the moment I buy 1 share, it’s going to $250/share. Maybe i’ll do that, so the rest of you can short….

Yes, I am jealous. Because I remember 1 pigg here was deciding between buying facebook and ended up buying netflix, and during that time, I thinking that wasn’t a bad idea. But I don’t why I never did get any shares. She clearly made out like a fiend, and my props off to her…. But yeah, I’ll admit, I have sour grapes on this one…

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