President Obama’s proposed tax hike on 529 college savings plans has ignited widespread outrage. Forbes,
I discovered the tax hike on Saturday night in a leaked press document. All of two lines, said in passing, were devoted to it in a ten page, single spaced PDF. The tax increase has since become the poster child of the entire tax plan, generating multiple stories in all the major press outlets. It’s the go-to line for most Republicans on Capitol Hill. It’s tripled the highest amount of traffic I’ve ever received in a Forbes column.
Why? I think there are several reasons, and they have everything to do with values, hopes for your children, and the middle class’ modern version of the American Dream. In other words, we on the Right have stumbled into an issue that resonates in a way that liberals generally do better than we–speaking to people’s hearts more so than their brains.
Middle class families are proud of their 529 plans. Dads who stay up with a new baby at home have a lot of time on their hands in the wee small hours of the morning. Some of them surf around to their state’s 529 plan setup website and sign up their little baby for a college account–something Dad himself never had growing up. Dad is proud that he can put $50 or $100 a month–more when he gets that promotion he’s been hoping for–into his son’s 529 plan. That’s his money, that he earned for his little family. It’s his. The government can’t take it away. By the time Junior is ready for college, the little dribs and drabs of savings means that college is totally affordable and the sky’s the limit…
That romantic, value-based narrative is what the Obama 529 plan tax hike attacks.