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Title: Blog by Novelist William S. Frankl, MD

Obama Retreats From His Assault on the 529s

In a a rare moment of sanity, Obama has acted appropriately. According to Fox News, “President Obama has dropped his plan to end tax breaks for popular college savings accounts known as 529s, sources told Fox News on Tuesday. The decision comes in the wake of stern criticism from Republicans and pleas from top Democrats, including House Minority Leader Nancy Pelosi, to drop the plan…Administration officials had claimed last week that they were going after the 529 accounts because they unfairly benefit high-income people. Under the proposed change, Americans eventually would have had to pay taxes on the earnings when they were withdrawn. A White House official told Fox News late Tuesday afternoon that the 529 provision was a ‘very small component’ of Obama’s plan to cut taxes for the middle class. ‘Given it has become such a distraction, we’re not going to ask Congress to pass the 529 provision so that they can instead focus on delivering a larger package of education tax relief that has bipartisan support, as well as the President’s broader package of tax relief for childcare and working families,’ the official said.”

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