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How do you feel about the tax cut on private school tuition?

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CriticalThought

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GOP Tax plan includes a break for private school families - Business Insider

The GOP tax reform bill passed the House on Thursday and eyes are shifting to the Senate versionnext.Both versions include a similar break seemingly aimed at wealthy families: the ability to withdraw from 529 plans to fund K-12 education.
529 plans sound technical, but they're basically just an investment account that allows college savings to grow tax-free, similarly to saving for retirement in an IRA. Current tax law permits families to withdraw their savings only for tuition and expenses related to college or graduate school.
The proposed GOP bills allow families to withdraw expenses up to $10,000 a year to pay for private elementary and high schools. That's a big change, and one that could yield significant benefits to wealthy families. A New York Times analysis estimated the savings could be more than $30,000 per 529 account.
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http://www.motherjones.com/politics...amilies-children-private-school-college-529/#

Matthew Chingos, a senior fellow and director of the education policy program at the Urban Institute, says expanding 529 accounts to K-12 schools would have little effect on the number of people who choose private schools. “You’d have to have enough money to not just pay for private school but to save for private school,” he says. As Richard Reeves and Katherine Guyot at the Brookings Institution point out, the 529 program currently benefits affluent families, mostly.

Rather, the expansion would represent “a decent-sized government handout to people who would send their kid to private school anyway,” Chingos says. “If you are trying to save up enough to send your child to a Catholic school for $6,000 a year, the tax benefit on those savings isn’t going to be that much,” he adds. “If you know you are going to send your child to a fancy private school in DC that costs $40,000 a year, then you could start stocking money away into one of these accounts and get a pretty big tax benefit. But who’s going to get that? It’s going to be pretty wealthy people.”
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It looks like a dream for the top 10%.
 
Basing "income" taxation on how and/or upon who that income was later spent should cease - that would be true income tax reform. There is no valid reason for two returns with exactly the same income having a different federal income tax liability.
 
ttwtt78640 said:
Basing "income" taxation on how and/or upon who that income was later spent should cease - that would be true income tax reform. There is no valid reason for two returns with exactly the same income having a different federal income tax liability.
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That is why I support a flat tax. I do understand that people with minor children have higher expenses than childless people and they could give some personal exemptions but cut all other exemptions. I know this is simplistic but the foundation should be one tax bracket for all of say 12% just to pick a number. that should include earned and unearned income.
 
CriticalThought said:
GOP Tax plan includes a break for private school families - Business Insider

The Republican Tax Plan Would Help Rich Families Send Their Children to Private School – Mother Jones

It looks like a dream for the top 10%.
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Do you consider Chicago Public School teachers in the top 10%? It is estimated that up to 40% send their OWN children to private schools. Why? Because CPS is horrible. In fact, nationwide, 11% send their kids to private schools. Do you think those are only rich people?

What is so DREAMY about it anyway? Contributions to a 529 are not tax deductible. Only the interest on them is deferred. Is a ROTH IRA dreamy? Do you think it’s fair that these same people still pay enormous taxes thru their real estate tax bills to failing schools even though they don’t use them?

Please tell us what’s so dreamy.
 
ttwtt78640 said:
Basing "income" taxation on how and/or upon who that income was later spent should cease - that would be true income tax reform. There is no valid reason for two returns with exactly the same income having a different federal income tax liability.
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Contributions to a 529 plan are not tax deductible.
 
Old Sarge said:
That is why I support a flat tax. I do understand that people with minor children have higher expenses than childless people and they could give some personal exemptions but cut all other exemptions. I know this is simplistic but the foundation should be one tax bracket for all of say 12% just to pick a number. that should include earned and unearned income.
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Having a significant (say $30K) truly standard deduction and then taxing gross income from all sources above that amount at 20% seems reasonable. With only two numbers in the tax code then our congress critters could no longer make massive amounts of campaign cash by selling all manner of "special" deductions, credits, exclusions and special accounting methods.
 
ttwtt78640 said:
Having a significant (say $30K) truly standard deduction and then taxing gross income from all sources above that amount at 20% seems reasonable. With only two numbers in the tax code then our congress critters could no longer make massive amounts of campaign cash by selling all manner of "special" deductions, credits, exclusions and special accounting methods.
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And your observation is the reason there will never be true tax reform.
 
MaggieD said:
Do you consider Chicago Public School teachers in the top 10%? It is estimated that up to 40% send their OWN children to private schools. Why? Because CPS is horrible. In fact, nationwide, 11% send their kids to private schools. Do you think those are only rich people?

What is so DREAMY about it anyway? Contributions to a 529 are not tax deductible. Only the interest on them is deferred. Is a ROTH IRA dreamy? Do you think it’s fair that these same people still pay enormous taxes thru their real estate tax bills to failing schools even though they don’t use them?

Please tell us what’s so dreamy.
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All excellent points. We decided to send our son to private school. Although it had a decent reputation there were problems. We felt double taxed. Paying for our local school through our property taxes in excess of 10K, then having to shell out for private school which was much more.

We are OK but not rich. Always felt when it comes to a child's education parents get to prioritize if they want to spend on that, versus a bigger house.
 
MaggieD said:
Do you consider Chicago Public School teachers in the top 10%? It is estimated that up to 40% send their OWN children to private schools. Why? Because CPS is horrible. In fact, nationwide, 11% send their kids to private schools. Do you think those are only rich people?

What is so DREAMY about it anyway? Contributions to a 529 are not tax deductible. Only the interest on them is deferred. Is a ROTH IRA dreamy? Do you think it’s fair that these same people still pay enormous taxes thru their real estate tax bills to failing schools even though they don’t use them?

Please tell us what’s so dreamy.
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Free goods are usually cheap in price tag only.
 
MaggieD said:
And your observation is the reason there will never be true tax reform.
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Yep, the difference between a bribe and a campaign contribution is simply who is getting paid.
 
CriticalThought said:
GOP Tax plan includes a break for private school families - Business Insider



The Republican Tax Plan Would Help Rich Families Send Their Children to Private School – Mother Jones



It looks like a dream for the top 10%.
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For years, private and parochial schools have been out performing US publicly funded schools producing students that are better educated at a cost that is far lower.

Far from being simply a dream exclusively for the top 10%, this is a doorway for the rest of us to be able to afford the advantages of the better outcomes available through better education.

Opposing this is opposing expanded choices to benefit ALL of our children and equipping them to compete in life more successfully.
 
ttwtt78640 said:
Yet the income that they generate is completely tax free because of how it is later spent.
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That is true. In both cases... the nondeductible ROTH and the 529. In the case of a 529, there are tight restrictions on how it may be spent.
 
MaggieD said:
Contributions to a 529 plan are not tax deductible.
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They should be. Withdrawals should them be taxable at the prevailing rate at the time of withdrawal.
 
CriticalThought said:
GOP Tax plan includes a break for private school families - Business Insider



The Republican Tax Plan Would Help Rich Families Send Their Children to Private School – Mother Jones



It looks like a dream for the top 10%.
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First, as I see it, the tax cut is not a tax cut, but rather allowing people to use the money set aside for education to be used for education.

I see the answer as vouchers. If you believe that education is an obligation of government, the the money should be spent in the most efficient manner. Monopolistic public schools isn't it.

Allowing the poor and middle class parents to avail themselves of the same educational opportunities as the rich seems to be bad thing for some.
 
code1211 said:
You misspelled how.
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Nope, how laws are made is directly dependent on who is making those laws. A political campaign is simply applying for an elected public office position - one has to seriously question why anyone would spend more to apply for a job than that job (officially) pays.
 
ttwtt78640 said:
Yet the income that they generate is completely tax free because of how it is later spent.
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Income should be taxed once at death. But then it schould be at one hundred percent. Our sociopolitical and financial technologies are not yet developed enough to face that challenge yet. But from what I can see, numerous capitals in the OECD are moving to make this bossible.

Until then the best would probably a flat income tax and VAT each of maybe 16 percent with a fiscal spending regime ootimised off that base. That's only an informed guestimate. But adding a certain resources taxation to the other two and adjusting them accordingly would likely be about the optimal reform.
 
joG said:
Income should be taxed once at death. But then it schould be at one hundred percent. Our sociopolitical and financial technologies are not yet developed enough to face that challenge yet. But from what I can see, numerous capitals in the OECD are moving to make this bossible.

Until then the best would probably a flat income tax and VAT each of maybe 16 percent with a fiscal spending regime ootimised off that base. That's only an informed guestimate. But adding a certain resources taxation to the other two and adjusting them accordingly would likely be about the optimal reform.
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It is extremely difficult to prosecute the dead for income tax evasion. ;)
 
MaggieD said:
Contributions to a 529 plan are not tax deductible.
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I am a fan of a school voucher system giving parents the choice of which school their kids go to and allowing their portion of taxes to go to that school.
 
ObamacareFail said:
I am a fan of a school voucher system giving parents the choice of which school their kids go to and allowing their portion of taxes to go to that school.
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Me, too. But that will never happen as that would mean failing schools would close.
 
ttwtt78640 said:
Having a significant (say $30K) truly standard deduction and then taxing gross income from all sources above that amount at 20% seems reasonable. With only two numbers in the tax code then our congress critters could no longer make massive amounts of campaign cash by selling all manner of "special" deductions, credits, exclusions and special accounting methods.
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As long as there is a flat tax above a certain amount that everyone must pay.
 
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