Remember the fable about the grasshopper and the ants? The ants toiled away day after day to gather food for the winter while the grasshoppers played in the sunshine and stored nothing. When winter came the ants were prepared and did not face problems, but the grasshoppers were left without food. They found themselves both starving and freezing. There's more to the story, but the moral of it all is to that hard work and planning for the future are essential to survival.
President Obama's latest foray into new ways to pay for college seems like an effort to rewrite the ant/grasshopper story. What Obama wants is for those families who have saved for many years to amass the funds to pay for college to be penalized and to give the benefits to those who neither worked nor saved toward the goal of college.
A little explanation is needed here. Obama announced that he is in favor of the federal government paying for the first two years of community college for students. That is the bit that the mainstream media picked up. They media is practically shouting cheers that go something like this: "Free tuition, free tuition, government's good, that's our position!!" Almost no one is talking about how Obama's plan actually works. The truth is that Obama wants to impose federal taxes on college savings accounts. That's right, all those families that saved for college in 529 accounts that the government had promised were tax free and now finding that Obama has threatened those savings with heavy taxes. Obama is taxing the ants to give to the grasshoppers.
The 529 accounts were set up many years ago so that families could save for college costs in accounts that were free of tax (like IRA's). If the money were used to pay for college, then the funds were never taxed. Millions of these accounts were established. Parents and grandparents who planned for the future put billions of dollars away so that it could grow tax-free to cover tuition and other expenses. People who saved enough to cover four years of college will only have enough for two or three years if the new Obama tax on these middle class folks is enacted. That's how Obama "helps" the middle class.
Then there are all those student loans that American college age kids have undertaken. A few years back, Obama threw the private banks who ran the loan programs out of the mix and made the federal government the only place to get student loans. Now, however, Obama is proposing another change in order to pay for his community college subsidies. Obama now wants student loan interest not to be tax deductible. New doctors who get out of medical school with a quarter of a million dollars in debt will no longer be able to deduct the massive interest payments on those loans. Graduates of the University of Connecticut, UCLA and Harvard will not be able to deduct their interest payments. In other words, students at four year colleges and in graduate schools will see a major increase in the cost of their student loans so the Obama can "give" some students free time in community colleges.
The truth is that this new Obama proposal is similar to Obamacare. In the medical field, Obama took the problem that there were a few million people who had difficulty getting insurance and nearly destroyed the health care for all Americans in order to address the problems. This time, Obama wants to create havoc among college students and their families so that he can offer subsidies to people who choose only to go to the lowest level of college.
President Obama's latest foray into new ways to pay for college seems like an effort to rewrite the ant/grasshopper story. What Obama wants is for those families who have saved for many years to amass the funds to pay for college to be penalized and to give the benefits to those who neither worked nor saved toward the goal of college.
A little explanation is needed here. Obama announced that he is in favor of the federal government paying for the first two years of community college for students. That is the bit that the mainstream media picked up. They media is practically shouting cheers that go something like this: "Free tuition, free tuition, government's good, that's our position!!" Almost no one is talking about how Obama's plan actually works. The truth is that Obama wants to impose federal taxes on college savings accounts. That's right, all those families that saved for college in 529 accounts that the government had promised were tax free and now finding that Obama has threatened those savings with heavy taxes. Obama is taxing the ants to give to the grasshoppers.
The 529 accounts were set up many years ago so that families could save for college costs in accounts that were free of tax (like IRA's). If the money were used to pay for college, then the funds were never taxed. Millions of these accounts were established. Parents and grandparents who planned for the future put billions of dollars away so that it could grow tax-free to cover tuition and other expenses. People who saved enough to cover four years of college will only have enough for two or three years if the new Obama tax on these middle class folks is enacted. That's how Obama "helps" the middle class.
Then there are all those student loans that American college age kids have undertaken. A few years back, Obama threw the private banks who ran the loan programs out of the mix and made the federal government the only place to get student loans. Now, however, Obama is proposing another change in order to pay for his community college subsidies. Obama now wants student loan interest not to be tax deductible. New doctors who get out of medical school with a quarter of a million dollars in debt will no longer be able to deduct the massive interest payments on those loans. Graduates of the University of Connecticut, UCLA and Harvard will not be able to deduct their interest payments. In other words, students at four year colleges and in graduate schools will see a major increase in the cost of their student loans so the Obama can "give" some students free time in community colleges.
The truth is that this new Obama proposal is similar to Obamacare. In the medical field, Obama took the problem that there were a few million people who had difficulty getting insurance and nearly destroyed the health care for all Americans in order to address the problems. This time, Obama wants to create havoc among college students and their families so that he can offer subsidies to people who choose only to go to the lowest level of college.
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