But there’s also a moral component to fiscal policy.
As such, they think that it is a “subsidy” if we are allowed to keep any of our earnings.
For months now, we’ve been in a nationwide debate over whether we should cancel up to $20,000 in student loan debt for tens of millions of people. …But hiding in plain sight is another federal program — 529 college savings plans — that offers the biggest benefits to wealthy families. …With some careful planning, no taxes will come due for most people as long as future generations use the money to pay for college…, graduate school…and any other related educational costs.
Mr. Lieber wants people to think these two policies (the student loan bailout and the tax provision) are both ways of giving benefits to people.
By contrast, Section 529 accounts allow people to keep their own money.
Here are some further excerpts from the column.
In 2015, President Obama proposed taxing future earnings in 529 accounts. The blowback from the upper middle class was so severe — and from Democrats and Republicans alike — that he rescinded the plan in the same month that he introduced it. …we did not, as a nation, feel the need to call on The Supremes to weigh in on the legality of maintaining tax-favored savings for millions of people who could afford many college educations anyway. We just canceled the cancellation of their sweet, juicy subsidy without a vote in Congress or a trial. …it is the wealthy who have the best opportunity to extract the largest breaks from the federal government when it comes to saving and paying for college.
I’m not surprised Obama was on the wrong side, but let’s ignore that and instead focus on Lieber’s assertion that Section 529 accounts are a “sweet, juicy subsidy.”
As already noted, I don’t think it’s right to say it’s a subsidy when people get to keep their own money. That’s reminiscent of the offensive “tax expenditure” term used by some of the people in Washington.
The bottom line is that folks on the left are wrong about IRAs and 401(k)s and they are wrong about Section 529 accounts.
Courtesy of International Liberty
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