“The President wants to allow the Internal Revenue Service to begin taxing distributions from so-called 529 plans, even if they are used as intended to fund legitimate educational expenses such as college tuition. The Obama plan is to treat withdrawn earnings from these savings plans—which are funded with money that’s already been taxed—as regular income to the beneficiary. Therefore this money will be taxed again before it can be used to pay for higher education.
But the President’s plan would only apply the new taxes to withdrawn earnings on money contributed to these accounts in the future. All past contributions to 529 plans would continue to grow and then be withdrawn tax-free to pay for school. . .“
Nice for families like the Obamas who have daughters heading for college soon. His plan won’t affect his family (assuming he has a 529—don’t know if millionaires use them). Wall Street Journal
Article 1, Section 8 of the Constitution says it is Congress who is supposed to be proposing taxes and collecting taxes. The President only gets 6 assignments, and 5 of those deal with security and protecting the nation. Oh well . . .he certainly isn’t the first. He’s got a lot of company on this one.