President Obama is retracting a key part of one of his proposals in this year’s State of the Union amid pressure from both Republicans and Democrats. The president delivered the address last week, in which he said he wanted to simplify the tax code.
ON SECOND THOUGHT: A few days after proposing it, Obama drops his plan to get rid of 529 college savings accounts http://t.co/KUxAplOsaq
— Dinesh D’Souza (@DineshDSouza) January 28, 2015
Part of the president’s overall plan to simplify the tax code was a controversial proposal to alter 529 plans — plans typically used for college savings. Obama wanted to end the benefit of tax free withdrawals from these plans, The New York Times reported. But after pressure from all sides, a White House official said it would no longer be submitting the proposal to Congress:
“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, paid for by eliminating the trust fund loophole and making sure the wealthy pay their fair share.”
House Speaker John Boehner, R-Ohio, was among those who criticized the proposal. He praised its withdrawal in a press release: “I’m glad President Obama has decided to listen to the American people and withdraw his tax hike on college savings, he said. “This tax would have hurt middle-class families already struggling to get ahead.”
— Speaker John Boehner (@SpeakerBoehner) January 27, 2015
Obama also faced pressure to scrap the proposition from key Democrats, including House Minority Leader Nancy Pelosi, D-Calif; Rep. Chris Van Hollen, D-Md., a senior member on the House Budget Committee; and Sen. Chuck Schumer, D-N.Y., The Associated Press reported.
Sen. Charles Grassley, R-Iowa, a senior member of the Senate Budget Committee, also lauded Obama’s reconsideration Wednesday. “It didn’t make sense to attack a program that encourages savings,” Grassley said in a press release. “The tax code encouraged all kinds of behavior, and saving for college is usually something everybody supports. The president’s dropping his misguided plan is a victory for common sense.”
h/t: The Blaze
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