529's: Big blunder in Washington, barely noticed in Raleigh
Published January 30, 2015
by Doug Clark, Off the Record, Greensboro News-Record, January 29, 2015.
It was "the first political debacle of 2015" for President Obama, wrote Charles Lane of the Washington Post:
"Under fire from Republicans and even House Democratic leaders, the White House withdrew this week its plan to end the tax-free status of the college savings accounts known as 529 plans."
Surely no North Carolina Republicans fussed about the misguided Obama proposal, since our GOP legislature last year eliminated the state tax deduction for contributions to the very same 529 college savings plans.
Hardly anyone fussed about that.
Everything's a bigger issue in Washington than in state capitals. But the North Carolina experience shows that, if you make enough tax changes at once, individual pieces can be overlooked.
Obama made a mistake of thinking this one might slip through, but it stood out instead.
Lane draws a valid conclusion, however: Changing the tax code will be very difficult, because all its deductions, write-offs and benefits have armies of lobbyists who will scream bloody murder and get their pet politicians to join in -- in Washington, if not in Raleigh.
January 30, 2015 at 8:54 am
Richard Bunce says:
The rest of the NC Tax story is the Legislature eliminated most specific deductions not just for the 529s and then of course the Legislature more than doubled the standard deduction so that taxpayers with 529s and without 529s had their taxable income substantially reduced and then a lower tax rate applied to it.
