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Your College Savings Plan: Obama Drops Plans to End Tax Exemptions for 529s Like MACS

WASHINGTON, D.C.–Saving for your child’s college education is expensive and some parents have chosen programs that draw interest, like the Miss. Affordable College Savings (MACS). There is relief across the country and for Mississippi parents after Pres. Obama dropped a plan Tuesday that would have ended some tax exemptions for people who have invested in those plans.

The Wall Street Journal reported that the White House dropped the plan after a huge backlash and pressure from all sides.

“Given it has become such a distraction, we’re not going to ask Congress to pass the 529 provision,” is what the newspaper said one White House official explained.

The president’s plan was part of an overall set of tax changes that he believes will essentially help the poor and middle class get more tax breaks. It would offset those breaks by having wealthier people pay more taxes.

State Treasurer Lynn Fitch disagreed with that assessment.

“Actually this creates a tax hike for the middle class,” she said this week. “People who use this primarily are the middle class.”

Fitch began her opposition to the president’s plan the day after the State of the Union address with a news release expressing her disappointment.

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